NEW YORK — Sentinel Capital Partners announced Jan. 25 plans to sell Pet Supplies Plus (PSP), a growing US pet specialty franchise, to Franchise Group, Inc. in a deal valued at $700 million. The two companies entered a definitive agreement for an all-cash transaction in January, and the deal officially closed on March 10.

Franchise Group expects tax benefits related to its purchase of Pet Supplies Plus to total approximately $100 million and annualized revenue of more than $3.6 million.

“We look forward to welcoming Pet Supplies Plus, its management team, employees, franchisees and neighbors to Franchise Group when this transaction closes,” said Brian Kahn, president and chief executive officer of Franchise Group. “PSP adds another franchise concept with strong unit economics, diversification into an economically resilient and secularly growing pet industry, and a brand that has and will continue to experience robust unit expansion from its franchise system.

“…We look forward to partnering with PSP’s outstanding and long tenured management team to accelerate their already ambitious expansion plans while leveraging Franchise Group’s best practice functions to drive incremental efficiencies,” Kahn added.

Pet Supplies Plus estimates a total, systemwide revenue of $1.2 billion, company revenue of $825 million, and adjusted EBITDA of almost $80 million, Franchise Group shared.

Sentinel acquired Pet Supplies Plus in December 2018 and has since seen the franchise add numerous new storefronts in new and existing markets across the United States. This includes its recent expansion in the Northeast region after acquiring roughly 40 stores previously owned by Pet Valu, as well as its 500^th store opening in 2020.

"We are extremely pleased with PSP's significant expansion and successful integration of new franchisees into its system," said Marc Buan, principal at Sentinel. "PSP is the No. 1 pet franchisor in the United States in an attractive, growing market driven by loyal consumers passionate about pet ownership. We were honored to work with PSP's highly committed and talented management team who have superbly positioned the company for continued growth."

News of this transaction comes just days after the franchise shared recognition from Entrepreneur Magazine, ranking it No. 21 of 500 fast-growing franchises in the United States. According to Entrepreneur, Pet Supplies Plus has increased its reach by 23.5% over the last three years with the addition of 96 stores.

"It was a pleasure to partner with Sentinel as we significantly grew the franchisee base through geographic in-fill and expansion into white space," said Chris Rowland, chief executive officer of Pet Supplies Plus. "Sentinel's deep experience investing in franchise-related businesses was a great asset to us throughout this entire period."

Other companies owned by Franchise Group include Liberty Tax Service, Buddy’s Home Furnishings, American Freight and The Vitamin Shoppe, which combined operate more than 4,000 stores across the United States and Canada. These businesses are either run by the company or through franchise agreements.

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