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The $30 Billion Kitty: Meet The Investor Who Made A Fortune On Pet Food

The standard playbook in private equity is to borrow, buy and cut costs ruthlessly. But a massive windfall from investments in Petsmart and Chewy has taught BC Partners’ Raymond Svider that sometimes, doubling down on risks is a better option.


Raymond Svider, chairman of private equity firm BC Partners, remembers the intense pressure he felt in the days leading up to Christmas in 2017. His firm’s biggest investment, the brick-and-mortar pet food retailer PetSmart, was flailing. Its antiquated technology needed an overhaul; costs were ballooning. Svider was splitting time between BC’s office on Madison Avenue in Manhattan and PetSmart’s Phoenix headquarters, where he was acting CEO. PetSmart’s bonds were trading just above 60 cents on the dollar. 

He arrived in Phoenix to learn from PetSmart’s CIO that the highly leveraged retailer had put in place a companywide hiring freeze to conserve cash, forcing it to rely on pricey contractors. 

“I didn’t know there was a hiring freeze,” recalls Svider, who canceled it on the spot, freeing his CIO to make 35 hires. “You need to be nimble and flexible. Sometimes strict rules force people to do the wrong thing because they’re just applying rules.” 

At the time, Svider was bucking almost every business and investing convention. A leveraged buyout artist raised in Paris, with a master’s degree in electrical engineering from one of France’s “grandes écoles” and an MBA from the University of Chicago, Svider, now 59, was working double duty—two days a week stewarding the $40 billion (assets) PE firm, three days at 1,650-store PetSmart, for which BC paid $8.7 billion in 2014. 

Loaded with $6 billion in debt from the LBO and a further $800 million dividend Svider had siphoned off, PetSmart was hurtling toward bankruptcy as pet owners moved steadily online. The standard playbook called for ruthless cost cutting to unearth the cash to repay lenders. Svider doubled down instead. 

He found loopholes in PetSmart’s credit agreements, enabling him to borrow even more money, angering creditors, so he could acquire unprofitable online pet food retailer Chewy. To the outside world, it was the 21st-century version of notorious dot-com flameout Pets.com. But Svider knew Chewy’s billionaire founder, Ryan Cohen, was beating every financial target he’d set years earlier when the two first met. Though it wasn’t profitable, Chewy wasn’t burning cash as it grew rapidly. Most importantly, it was beating Amazon in its niche. It was the perfect way to burnish his troubled bet on PetSmart.

Starting with an offer of $1 billion, Svider wound up paying $3 billion in cash for Chewy, beating out rival Petco, in April 2017. Skeptics howled, its bonds tumbled and lawsuits flew. But four years and a pandemic-inspired pet boom have turned Svider’s rulebreaking gambit into one of the biggest private equity scores ever. 

Chewy, now publicly traded, is worth more than $31 billion, and its sales have skyrocketed nearly tenfold, to a projected $9 billion for 2021. PetSmart itself is deleveraging, having refinanced its buyout debt in January. All told, Svider’s investors are sitting on a $30 billion windfall. 

“You need to be ruthless and very fast to adapt because in any business, the world is changing every day in ways you can’t anticipate,” says Svider in his French accent, speaking from the Hamptons mansion where he now works remotely alongside his wife, three children and a pair of cats, Cashmere and Pearl. “Conviction is really important.” 

A self-taught investor, Svider got his start after the go-go 1980s’ leveraged buyout craze. In 1989, he was recruited out of graduate school by legen­dary dealmakers Bruce Wasserstein and Joe Perella. Three years later, he moved to the Paris office of Baring Capital Investors, a small buyout arm attached to London-based Barings Bank. 

In 1995, a rogue trader at Barings, Nick Leeson, lost over $1 billion, rendering the 300-year-old bank insolvent. Barings was bought by competitor ING for pennies on the dollar. It turned out to be a stroke of luck for Svider, who had been working alongside the division’s cofounder. Baring Capital was spun off and renamed BC Partners. 

In the early 2000s, Svider moved to London to cut telecom deals as markets were deregulated, and in 2007, when BC Partners expanded into North America, Svider took the helm. 

The firm’s first major deal in the U.S. that year was a $16 billion takeover of indebted satellite operator Intelsat, which promptly became troubled and would file for bankruptcy protection in 2020. Svider’s hits, though, have far exceeded his misses. 

Nothing characterizes his wins more than a willingness to take bold bets. One standout is GFL Environmental, a Toronto-based waste management rollup founded by Canadian entrepreneur Patrick Divogi. In 2018, BC Partners recapitalized the company at a $2 billion value, building a 40% stake and looking to expand it in the U.S. with acquisitions. 

When the coronavirus crisis hit, GFL was working on an IPO; Svider recommended to Divogi that they forge ahead despite the market’s tumult. GFL priced its IPO at $19, below a pre-pandemic range of $20 to $21—one of just five listings in March 2020. Being public, Svider believed, would help GFL capitalize on the coming market dislocation. After an early tumble to $13, GFL’s stock has nearly tripled as it acquired assets from

Houston’s Waste Management and other competitors. BC Partners’ GFL holdings are now worth nearly $5 billion, almost three times its initial investment. “Raymond has a unique ability to cut through the BS and focus on the big picture,” Divogi says. 

Despite private equity’s long-standing habit of realizing profits as quickly as possible, Svider seems to have little interest in selling Chewy, despite the fact that since mid-August, shares have fallen from $96 to $75, wiping out about $7 billion in gains as pandemic pet spending slowed.

BC Partners has a 76% position in the stock that’s now worth nearly $25 billion. 

There may be one more winning move left in Svider’s pet sector gambit: the IPO of PetSmart, which could fetch a $10 billion valuation. The once troubled retailer’s revenue rose 17% in the second quarter to $2.3 billion, and in the first half it generated $342 million in free cash flow. PetSmart’s formerly distressed bonds now trade above par. 

Svider insists the pet market—including a new focus on health care—remains underappreciated. Is he looking to consolidate his gains with a quick exit? Not necessarily, he says: “We don’t feel that we’re in a particular rush.”  

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