• by Thom Forbes , December 15, 2014

In what is the largest private-equity deal of the year so far, a consortium led by London-based BC Partners is acquiring PetSmart’s chain of 1,387 stores in the U.S., Canada and Puerto Rico for $8.7 billion, indicating that smart money believes there’s still some gravy left in a dedicated chain that has been squeezed both by big-box retailers and online competition.

The price “represents a 6.86% premium over PetSmart’s closing price on Friday, but a whopping 46.2% bump over its 2014 nadir on May 22,” writesFortune’s Dan Primack. BC Partners apparently “made a last-minute move to best Apollo Global Management, which yesterday was reported to be the front-runner,” continues Primack.

The deal, which requires approval from shareholders, is expected to close in the first half of 2015. It was a “buyout spurred on by” Jana Partners, which “disclosed a near 10% stake in the company and its intention to engage with the company’s management on a sale of the business,” reports Antoine Gara in Forbes.

The Phoenix-based chain “is the top dog and the cat's meow in its industry,” according to its Hoover’s profile, ranking No. 376 in the Fortune 500 as of last June. “The retailer offers a noteworthy 11,000 products, which range from scratching posts to iguana harnesses.”

It also provides in-store PetsHotel boarding facilities, grooming services, obedience training, as well as veterinary services in about 845 of its stores, according to Hoover’s.

This expansion into services was a deliberate effort to differentiate itself from increasing competition in the mid-’00s, then-CEO Bob Moran said in a Fortune video interview in 2010. David K. Lenhardt has been CEO since June 2013.

PetSmart “has given up market share to broader-focused competitors such as” Target and Wal-Mart in addition to Amazon, report David Benoit, Dana Mattioli and Mike Spector in TheWall Street Journal, who point out that “a number of retailers have come under pressure in recent years as consumers changed shopping habits and began shopping online more.”

Office Depot and OfficeMax merged last year, for example and both Dollar General and Dollar Tree are trying to buy Family Dollar Stores.

“PetSmart has lagged behind on e-commerce sales, a point Jana has consistently criticized,” say Benoit, Mattioli and Spector

“The months-long auction of PetSmart eventually drew the interest of some of the biggest private equity firms, including Apollo Global Management, Kohlberg Kravis Roberts and Clayton Dubilier & Rice,” reports Michael de la Merced in TheNew York Times.

“The question is, ‘Why haven’t there been more people interested in PetSmart?’” Raymond Svider, a managing partner of BC Partners, tells de la Merced. “The category of pet products has been growing in the U.S. and abroad consistently for a number of years.”

And that’s not expected to change.

“Going forward, growth in the pet industry is projected to be 4% annually through 2018” writes Clarice Brough in a Multibriefs.com roundup on industry trends.  “…The number of households owning pets is expected to continue to increase along with an increase in discretionary income as the economic recovery takes hold. These two factors combined will continue to bolster the demand for premium products, foods and pet services.”

It is fitting that today’s “A.Word.A.Day” with Anu Garg is “dog’s chance,” with the earliest documented use dating back only to 1890. “In modern times dogs may be pampered, but historically a dog's life wasn't much to bark about,” writes Anu Garg. “Hence a dog's chance is a small chance.”

There’s $8.7 billion riding on the expectation that the sentiment expressed by the phrase is anachronistic.