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Investing.com -- Chewy Inc (NYSE:CHWY) stock climbed 2.2% on Thursday after the pet products retailer announced it would acquire SmartEquine, LLC from Covetrus, Inc. in an all-cash transaction that expands its presence in the high-margin equine health products market.
The acquisition of SmartEquine, a leading U.S. provider of equine health products known for its subscription-based supplement programs, is expected to strengthen Chewy’s position in the equine category and accelerate its expansion into higher-margin health and wellness verticals.
Chewy plans to finance the deal through its existing balance sheet and expects the transaction to be adjusted EBITDA margin accretive upon closing, which is anticipated in the fourth quarter of fiscal year 2025, subject to regulatory approvals and other customary closing conditions.
"We are thrilled to welcome SmartEquine to Chewy," said Mita Malhotra, President of Chewy Health. "Together, we’ll bring even greater expertise, convenience, and care as a trusted destination for the equine community."
The company highlighted several strategic benefits from the acquisition, including category expansion into high-margin equine supplements, synergies between both companies’ subscription models, increased customer lifetime value through expanded share of wallet, and financial accretion.
Alongside the acquisition announcement, Chewy reaffirmed its third quarter fiscal year 2025 financial guidance previously provided on September 10 as part of its second quarter earnings release.
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