Warburg Fund wants to boost market of pet shops

SAO PAULO-the Warburg Pincus Fund just bought control of the Pet Center Marginal, in an operation that marks the entrance of private equity companies-who buy stakes in retail companies of pet products in Brazil. With the arrival of the Fund, the retailer intends to accelerate its expansion plan. The goal is to more than triple in size in five years and form a network of 100 stores.
The negotiation between the founder of the company, Sergio Zimerman, and Warburg Pincus, commanded in Brazil by the former President of Alcoa world, the Brazilian Alain Belda, lasted two years. The deal was disputed by other funds, such as BTG Pactual, Carlyle, Advent, homeland and Neo Investments.
What weighed in the choice of the partner was not the price. Was the best? fit? of thinking?, said that Zimerman says he has been approached by at least 15?? funds and doesn't reveal the value of the sale. ?Sold to accelerate the company's growth.?
Sought, the Warburg Pincus did not interview. In a statement, the Fund said the acquisition is? an example of investment approach focused on growth of Warburg Pincus?. Today, the Pet Center Marginal is the market leader and intends to close the year with 27 stores and revenue of $ 250 million. The company will close 2013 growth of 47% in its total revenue; considered only the stores open more than a year, the advance will be at 12%.
The sale of the company's resources will be contributed in his own company and mainly used to transform the Pet Center Marginal in a national network-today's units in Sao Paulo, Rio, Brasília and Goiânia.
Each store requires at least 1,000 square meters of area and requires investments between $ 2.5 million and $ 4 million, estimates the marketing director, new business and expansion of the Pet Center Marginal, helium Freddi Son. This means that raising the number of 27 stores to 100 may require investments of up to $ 290 million.
In high
The appetite of funds by the company is explained by her being one of the few networks in a market with great growth potential, explains Luiz Goes, partner responsible for market intelligence area of GS & MD. ?Is a market extremely unfocused. Sales of the five largest companies represent less than 5% of the total sector.?
The comparison between the leaders in the Brazilian market and American shows how the scenario of the thread can change around here. The Pet Center Marginal and Cobasi close 2013 with 49 stores, against no less than 2.5 thousand shops networks PetSmart and Petco, USA.
?There are many opportunities in Brazil. The funds have an appetite for this market, but there are few alternatives for acquisitions?, says Goes. According to him, there is room for the development of franchises, formation of regional networks and to build a brand from scratch.
The Warburg Pincus will hold 50.01% of the capital of the Pet Center Marginal and the remainder stays with the family Zimerman. The founder will follow in the company's Presidency, but management changes are planned. The company will create a Board of Directors and has begun hiring new executives, from companies such as Starbucks and Brazil Pharma.
Mark
The Pet Center hired consultancy FutureBrand too Marginal to evaluate your brand and format of stores. ?We want to understand if our brand makes sense to act in all Brazil or if we need to make adjustments, said Director of marketing.
The name was created in order to baptize a single store, opened in Marginal Tietê, in the northern zone of São Paulo, in 2002. Was the alternative that Zimerman found to replace another business-wholesale of perfumery-that wasn't going well.
Before deciding the pet shop, the entrepreneur came to examine the possibility of opening a shop of perfumes and thought of entering the retail of toys. ?At that time, only Cobasi had Megastores in this segment. And they had no units in the northern zone of São Paulo. It was an opportunity?, remember Zimerman.
The megastores are still minority in that niche retailers in Brazil, but we are changing the offer of products and services. In addition to essential items, such as rations, collars and veterinary products, they began to offer pampering for animals.
Luxury
Until then products unique to humans have been tailored to suit pets. There's ice cream, Panettone and even beer for dog-which now also has luxury products. With all these innovations, the market of products and services for pets must move $ 15.5 billion this year, an increase of 9.2% compared to 2012, according to estimates from the Associação Brasileira da Indústria de Pet Products (Abinpet). The information is from the newspaper O Estado de s. Paulo.