Chuck & Don’s, a pet-food retail chain with stores in four states, has been sold to a private equity-backed firm.
New York City-based Independent Pet Partners (IPP) said it will create a co-headquarters location in the Twin Cities with members of the current Chuck & Don’s team to help grow the other pet-store brands in its portfolio.
Tom Murphy, chief financial officer of the Mahtomedi-based Chuck & Don’s, will become CFO of IPP. The release announcing the deal said all 494 employees would be retained.
The industry publication Pet Business called IPP a “rising star in pet retail” for quickly putting together its roster of premium pet retail chains. The company backed by TPG Growth, a San Francisco based private-equity firm, began making acquisitions of premium pet-store chains in July 2017.
With Chuck & Don’s, IPP now operates 165 high-end pet stores in 12 states and the District of Columbia. Other chains in its portfolio include Kriser’s, Natural Pawz, Bark!, Especially for Pets, Pet Source, Whole Pet Central, Dogma and Pet Life.
“Chuck & Don’s gives IPP a valuable and strong brand that can help us continue to strive to make pet parenting simple, smart, social and fun,” said Jeff David, CEO of IPP in a news release on Friday announcing the sale. “With this partnership, we are able to leverage Chuck & Don’s great people and processes to build on our family of pet store brands.”
Chuck & Don’s is the largest of the chains to be acquired by IPP both in stores and number of employees, Murphy said. IPP plans to build out the corporate functions of the consolidated company here because of Chuck & Don’s size but also because it can recruit top retail talent due to the retail expertise in the area.
Chuck & Don’s was founded by Charles “Chuck” Anderson and Don Tauer in 1990. In 1996, Bob Hartzell invested in the company and eventually became CEO and a majority owner.
The chain’s 2018 revenue was approximately $88 million, Murphy said, and revenue for the consolidated company is expected to be $200 million for 2019.
Several years ago, Hartzell and Anderson decided to sell the company to employees via an ESOP, or employee stock ownership plan.
Murphy said that the ESOP plan was started in 2013, and Hartzell and Anderson had been selling to the employees gradually. “The ESOP currently owns 6.5 to 7 percent of the company,” Murphy said.
Employees who own shares will be able to roll their proceeds from the sale into a qualified retirement plan. Employees in an ESOP know the value of their shares based on annual valuations of their companies.
Terms of the deal with Chuck & Don’s and IPP were not disclosed, but Murphy did say the full sale price of the company was significant. “It was two-and-a-half to three times the premium of the last ESOP valuation.”