(Adds details on Woolworths, CEO comment)
Dec 15 (Reuters) - Australian supermarket chain Woolworths Group Ltd (WOW) said on Thursday it will acquire a 55% stake in pet food and services retailer Petspiration Group for A$586 million ($401.70 million) in cash.
Petspiration is the owner and operator of retail brand PETstock, and has a network of 276 stores across Australia and New Zealand. The company has an enterprise value of about A$1.7 billion.
"Specialty pet is a large and growing retail segment in which we have limited presence," Woolworths Group CEO Brad Banducci said. He added the company was confident of a "strong" return on the investment for its shareholders.
Woolworths said it will fund the Petspiration deal with proceeds raised from a recent 5.5% stake sale in alcohol retailer Endeavour Group (EDV) .
The grocer has been looking for newer avenues since growth in grocery shopping has slowed as people return to eating in cafes and restaurants, while surging inflation and cost pressure dent its bottomline.
Woolworths earlier this year bought an 80% stake in online retailer MyDeal.com, but scrapped its bid for drugstore chain Australian Pharmaceutical Industries, saying it was unable to validate the financial returns of the deal.
The Petspiration deal, which is subject to certain regulatory approvals, is expected to complete in mid 2023. ($1 = 1.4588 Australian dollars)
News: WOW UPDATE 1-Woolworths to take 55% stake in pet food retailer Petspiration for $401 mln
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