Woolworths Group says the sale of 5.5 per cent ($636 million) of its stake in Endeavour Group will be used on new investments and general business. The group didn't waste time, announcing the acquisition of 55 per cent of Petspiration Group the following day.
Woolworths sold the 5.5 per cent in a block trade for $6.46 per share, with CEO Brad Banducci saying the decision came after the successful transition from "ownership to partnership".
The company announced its plans to spin off Endeavour in 2019, when it was Endeavour Drinks, through a merger with ALH Group, and then a demerger as Endeavour Group.
The plan was derailed by Covid, but completed in June 2021 after a shareholder vote. Endeavour listed on the ASX the same month.
Woolworths retained a 14.6 per cent stake in the business, which is now 9.1 per cent. The company said it had no intention for a further selldown in the "short to medium term".
The two still partner in a number of areas:
- Woolworths provides supply chain solutions through Primary Connect;
- joint food and liquor offering through co-located BWS stores and online;
- WPay payment services; and
- Everyday Rewards
Aquires PETstock parent
The next day (14 December), the group announced it had acquired 55 per cent of Petspiration Group, the owner and operator of PETstock, for $586 million.
The company, founded and based in Ballarat, Victoria, has 276 stores, established eCommerce platforms, a 2.4-million-member loyalty program, and its own brands including Caribu and Glow.
Banducci said, "Specialty pet is a large and growing retail segment, in which we have limited presence. We are delighted to be investing alongside founders, Shane and David Young.
"Specialty pet is a logical adjacency given the high penetration of pet ownership across Australia and New Zealand."
The Australian specialty pet sector is worth around $10 billion, with strong repeat purchase behaviour. Roughly 70 per cent of Australian households have at least one pet and spend 28 per cent more on their fur babies than pet owners in the US.
He added, Woolworths would support Petspirations growth through its digital and eCommerce, supply chain, retail media, form and network development, and advanced analytics capabilities.
Shane and David Young started the business 30 years ago and will stay on as CEO and managing director respectively. They will retain a 45 per cent equity with other existing shareholders.
It will be a stand-alone business in the group, with a separate board and governance structure. Von Igram, the newly appointed managing director of W Living, will be responsible for Petspiration and finding ways to increase its value across the group.
