AFR: Mad Paws acquires Pet Chemist, kicks off raising


ASX-listed Mad Paws Holdings has struck a $20 million deal to acquire online pet medication and healthcare products business Pet Chemist and launched an equity raising to help fund it.

Mad Paws will pay $5.5 million cash and issue $14.5 million worth of shares for the business, and up to another $5 million in the coming two financial years based on performance hurdles.

The deal valued Pet Chemist at 2½ times operating revenue, based on annualised first half FY22 numbers.

The acquisition was to be partly funded by a $5 million equity raising via stockbrokers CCZ Equities and Petra Capital.

The brokers were seeking buyers for new shares at 18¢ each, which was a 10 per cent discount to the last close, according to terms sent to potential investors.

The term sheet pitched Pet Chemist as “Australia’s leading online supplier of pet medication and premium healthcare products”, with $9 million in merchandise sold in the 2021 financial year and more than 44,000 active customers.

Pet Chemist is owned by Howard Humphreys. It was advised by Hawkesbury Partners.

Mad Paws’ brokers were calling for bids into the placement by 5.30pm on Monday.

Source: The Australian Financial Review