Coles is in advanced talks to buy Greencross, the pets and vets business founded by former Shark Tank Australia investor Dr Glen Richards, in a deal that would value the company at around $4 billion. Greencross owns Petbarn and City Farmers retail chains along with more than 140 vet clinics and 24 animal hospitals across Australia and New Zealand. It's a deal eight years in the making, and one that's already been down several other roads first.
TPG took Greencross private for $675 million in 2018, before selling 45 per cent of it to AustralianSuper and the Healthcare of Ontario Pension Plan in 2022 at a valuation north of $3.5 billion. As recently as January, TPG's bankers were prepping a $700 million-plus IPO that would have returned Greencross to the ASX after an eight-year absence, with earnings having grown to around $400 million. That IPO never happened. A $3.75 billion trade sale to pharmaceutical distributor EBOS also collapsed in 2023 after investors got cold feet on the funding. This time, TPG looks to be taking the trade sale route again, this deal has been quietly in the works for almost a year.
For Coles, it's a second crack at pet care after quietly shutting down its own Swaggle venture in March, and it would put Australia's two largest supermarkets head to head in the category. Woolworths already owns 55 per cent of Petstock.
The catch is regulatory. The ACCC just blocked a new Coles store from opening in Kalgoorlie, and Coles is still waiting to learn how much it'll be fined after losing a Federal Court case over misleading discount claims. Coles' shares fell about 5 per cent on the news. None of that stops this deal, but it does mean Coles has to convince both shareholders and a watchdog that's clearly paying close attention that this one's worth pursuing.
