PetSmart Announces Agreement to Acquire Chewy, A Leading Online Pet Retailer

Combined Company Provides Most Convenient Customer Experience Across
Brick and Mortar and Online Channels

PHOENIX–(BUSINESS WIRE)–PetSmart, Inc. (“PetSmart”) today announced it has entered into a
definitive agreement to acquire Chewy, Inc. (“Chewy”), the online pet
retailer. The acquisition accelerates the execution of PetSmart’s
strategy and is a critical milestone in its transformational journey to
be the most convenient, best-in-class pet retailer. The combination of
PetSmart and Chewy will enhance both companies’ capabilities and reach,
offering the widest selection of pet products and services available
both in-store and online in North America. The acquisition, which is
subject to customary regulatory approvals, is expected to close by the
end of PetSmart’s second fiscal quarter of 2017.

“PetSmart strives to be the trusted partner to pet parents and pets in
every moment of their lives,” said Michael Massey, president and chief
executive officer of PetSmart. “We are focused on improving our
customers’ experience in-store and online as we continue to execute
against our long-term strategic initiatives. Chewy’s high-touch customer
e-commerce service model and culture centered around a love of pets is
the ideal complement to PetSmart’s store footprint and diverse
offerings. Together, PetSmart and Chewy will provide the most convenient
customer experience to a wider base of pet parents across every channel.”

Chewy is one of the leading online retailers of pet products and has
seen extraordinary growth since it was founded by Ryan Cohen and Michael
Day in 2011. Chewy’s position in the growing, underpenetrated online pet
retail segment complements PetSmart’s strong footprint in brick and
mortar, with over 1,500 stores and 55,000 dedicated associates across
North America. In addition to providing a “wow” customer experience,
Chewy’s extensive product selection and subscription model have
attracted and retained a significant customer base that has contributed
to the growth of customer purchasing through online channels.

“Since we started Chewy, we have been dedicated to understanding and
satisfying the evolving needs of our customers to deliver the highest
quality pet products and customer service,” said Ryan Cohen, co-founder
and CEO of Chewy. “Combining our strong e-commerce expertise with
PetSmart’s best-in-class infrastructure, footprint and breadth of
offerings including services will help us ‘wow’ our customers even more.”

Upon closing, Chewy will continue to be led by CEO Ryan Cohen and
operate largely as an independent subsidiary of PetSmart, focusing on
its current business strategy, while PetSmart will continue to execute
its strategic initiatives across the combined company. Both companies
will use their shared innovative capabilities and offerings in order to
deliver the most value and convenience to customers.

Both companies share a common goal to improve the lives of pets and
people, dedicating significant time and resources to nonprofit animal
welfare organizations. PetSmart Charities is the leader in pet
adoptions, having facilitated more than 7 million adoptions since 1994,
and the largest funder of animal welfare in North America. This
organization is complementary to Chewy’s philanthropic efforts,
including the Chewy.com Rescue and Shelter Network.

Financial advisors to PetSmart on this transaction were Citi and
Barclays, with Simpson Thacher & Bartlett LLP acting as its legal
advisor. Citigroup Global Markets Inc. and Barclays also provided
committed financing for the acquisition. Equity financing is being
provided by PetSmart’s existing shareholders. Financial advisor to Chewy
on this transaction was Allen & Company, with Weil, Gotshal & Manges LLP
acting as its legal advisor.

About PetSmart

PetSmart, Inc. is one of the largest pet retailers of services and
solutions for the lifetime needs of pets. At PetSmart, we love pets and
we believe pets make us better people. Every day with every connection,
PetSmart’s passionate associates help bring pet parents closer to their
pets so that together, they can live more fulfilled lives. This vision
impacts everything we do for our customers, the way we support our
associates and how we give back to our communities. We employ
approximately 55,000 associates, operate more than 1,500 pet stores in
the United States, Canada and Puerto Rico, as well as more than 200
in-store PetSmart® PetsHotel® dog and cat boarding facilities. PetSmart
provides a broad range of competitively priced pet food and products, as
well as pet-focused services such as dog training, pet grooming, pet
boarding, PetSmart ® Doggie Day Camp® and pet adoption. PetSmart,
together with non-profits PetSmart Charities® and PetSmart Charities™ of
Canada, invite more than 3,000 animal welfare organizations to bring
adoptable pets into stores so they have the best chance possible of
finding a forever home. Through this in-store adoption program and other
signature events, PetSmart has facilitated more than 7.3 million
adoptions – more than any other brick-and-mortar organization. PetSmart
also operates AllPaws, an online pet adoption platform that helps
potential pet parents find the perfect pet to adopt based on their home,
family and lifestyle. PetSmart offers the most comprehensive pet care
information in the U.S. In celebration of its 30th anniversary, PetSmart
launched its Buy a Bag, Give a Meal™ program in March 2017. For every
bag of cat or dog food purchased March 1 – Dec. 31, 2017, PetSmart will
donate a meal to pets in need and expects to donate more than 60 million
meals in 2017.

About Chewy

Chewy is a leading online retailer of pet food and products in the
United States. Founded in 2011 by entrepreneurs, Ryan Cohen and Michael
Day, Chewy set out to offer pet parents the expertise and service of a
local pet store with the convenience of online shopping. Chewy delivers
on that promise with its dedication to 24/7 customer service, creation
of cutting-edge software and technology to enhance the user experience,
and commitment to sourcing high quality products. Headquartered in Dania
Beach, Florida, Chewy currently employs more than 5,000 pet lovers both
in their home office, Boston office and fulfillment centers in
Pennsylvania, Indiana, Texas and Nevada. For more information, visit www.chewy.com.

Contacts

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Kathleen
Lacey, 917-520-9717
kathleen.lacey@teneostrategy.com
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Liz
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liz.bruce@teneostrategy.com