Why Mad Paws’ $62M Sale to Rover Could Reshape Australia’s Pet Care Market
Mad Paws Holding Limited has agreed to be acquired by US-based Rover Group for $62 million, with shareholders set to receive a significant premium. The deal includes divestment of Mad Paws’ Pet Chemist business and closure of other e-commerce operations.
- Rover to acquire 100% of Mad Paws shares at $0.14 per share
- Transaction values Mad Paws at approximately $62 million
- Pet Chemist business sold separately to VetPartners for $13 million
- Mad Paws Board unanimously recommends the scheme
- Deal subject to shareholder, court, and FIRB approvals
Acquisition Agreement and Premium Offer
Mad Paws Holding Limited (ASX, MPA), a leading Australian online pet services marketplace, has entered into a binding Scheme Implementation Deed with Rover Group, Inc., a US-based pet care marketplace operator. Under the agreement, Rover proposes to acquire all issued shares of Mad Paws through a scheme of arrangement at a cash price of $0.14 per share. This offer represents a substantial premium of 87% over Mad Paws’ last closing price and more than 120% over its 30- and 60-day volume weighted average prices.
The total equity value implied by the transaction is approximately $62 million, reflecting Rover’s strategic interest in Mad Paws’ marketplace business. The deal notably excludes Mad Paws’ online e-commerce division, which includes the Pet Chemist, Sash, and Waggly brands.
Divestment of Pet Chemist and E-Commerce Closures
As part of the transaction, Mad Paws has agreed to divest its Pet Chemist business to VetPartners Australia Pty Ltd for around $13 million in cash, subject to customary adjustments. This divestment is a key condition precedent to the scheme’s implementation. Additionally, Mad Paws will close down the remaining e-commerce businesses operated under the Sash and Waggly brands.
The divestment and closures are intended to streamline Mad Paws’ operations to focus on its core marketplace platform, aligning with Rover’s global business model. The Pet Chemist’s founder, Howard Humphreys, will continue as CEO of the divested business but will resign from the Mad Paws board upon completion.
Board and Shareholder Support
The Mad Paws Board has unanimously recommended that shareholders vote in favor of the scheme, subject to the absence of a superior proposal and a positive independent expert opinion confirming the transaction is in shareholders’ best interests. Key shareholders, including directors holding approximately 14.5% of shares and the largest shareholder Bombora Special Investments Growth Fund, have committed to support the scheme.
Mad Paws’ CEO and co-founder Justus Hammer expressed enthusiasm about the partnership with Rover, highlighting shared goals in enhancing pet care services and expanding the Australian pet care ecosystem under Rover’s global footprint.
Conditions and Timeline
The scheme is subject to several conditions, including shareholder approval, court sanction, and Foreign Investment Review Board (FIRB) clearance. The transaction is not contingent on financing conditions, providing certainty to shareholders. The expected timetable anticipates shareholder meetings and court hearings between October and November 2025, with completion shortly thereafter.
Upon completion, Mad Paws will continue to operate as a distinct brand within Rover’s portfolio, maintaining its Sydney base and leadership team.
Bottom Line?
As Mad Paws prepares to integrate with Rover, investors will watch closely for regulatory approvals and any competing bids that could reshape the deal’s trajectory.
Questions in the middle?
- Will the independent expert maintain a positive opinion through to the scheme meeting?
- How will the divestment of Pet Chemist impact Mad Paws’ financials and operational focus?
- Could a superior proposal emerge before shareholder approval, altering the deal dynamics?
