Expected to close by the 2006 fourth quarter, the transaction was subject to approval by Petco stockholders and federal regulators at press time.

Petco shares, closing at $19.45 the day before the acquisition was announced, soared to $27.79 immediately afterward.

“This proposed transaction provides Petco stockholders with an immediate cash premium for their investment in the company, based on the trading range of Petco shares over the past several months,” said James M. Myers, chief executive officer for the company. “Upon completion of the transaction, Petco will be a private company that will have greater flexibility to accomplish its long-term plans, which, we believe, will be favorable for the company’s associates and suppliers and the customers we serve through more than 800 stores nationwide.”

The new owners should know what they’re getting: The same two companies organized a $600 million buyout of Petco in May 2000.

Petco went public again in February 2002.

Petco operates more than 800 stores in 49 states and the District of Columbia, as well as an online store.

The largest private-equity firm in Southern California, Leonard Green & Partners specializes in organizing, structuring and sponsoring management buyouts, going-private transactions and recapitalizations of established public and private companies. The company manages approximately $3.7 billion of private-equity capital.

Texas Pacific Group invests in world-class franchises in a range of industries and has extensive experience with public and private investments executed through leveraged buyouts, recapitalizations, going-private transactions, spinouts, joint ventures and restructurings. It manages more than $30 billion of assets. [September 2006 PET AGE]