29 November 2000

POTB & PPJ Merger

Following speculation last week that Pets Pyjamas had been rescued by an investor in the on-line pet retail sector, it was announced today that Pets Pyjamas and rivals petsonthebrain are to merge. Pets Pyjamas today issued the following statement: "The Consulta Smaller Companies Fund, a specialist venture capital fund advised by Consulta Limited in London, has acquired a majority equity interest in Pets Pyjamas Limited, the leading on-line pet products company for an undisclosed consideration. Premium Petcare Limited, the parent company of Pets Pyjamas, went into administration on 13 November 2000. Ernst & Young were appointed administrators to the Company and have successfully concluded the sale of Pets Pyjamas as a going concern. Pets Pyjamas has recommenced trading following its acquisition by Consulta." "The Consulta Smaller Companies Fund also has a significant investment in petsonthebrain ("POTB"), a company that was set up to provide an e-commerce solution in the pet products space working in partnership with the veterinary community. Consulta, together with an investor group, plan to merge the two companies to create a market leader in the sector." The statement continues: "The enlarged group said it will be in a position to capitalise on the combined business strengths of the two companies. Alistair Angus, Chief Operating Officer of Pets Pyjamas, and Garret O'Leary, Chief Executive Officer of petsonthebrain, plan to work closely together under the chairmanship of Nigel Cayzer in taking the Group forward." Nigel Pilkington, manager of the Consulta Fund, said: "We are delighted to have acquired the number one operator in the market. With so many internet-related companies failing, it is easy to conclude that the whole concept is flawed. However, Pets Pyjamas is predominantly a catalogue retailer that fell foul of the collapse in e-tailing valuations. Having largely avoided the 'dotcom' wave, we are selectively looking opportunistically to benefit from 'last mover advantage' to acquire companies with dominant market share and broad customer acceptance. Pets Pyjamas with the most comprehensive product offering in the market, has a substantial active customer base which, when combined with that of petsonthebrain, will solidify their position as the acknowledged market leader." Although it has not yet been confirmed, we understand that the sites will continue to trade under their existing names but the group will collect under the Pets Pyjamas banner. Redundancies are likely at petsonthebrain which is to move its operations from London to the Pets Pyjamas offices in Liverpool. Elspeth Knight, Communications Officer at POTB stressed that the changes will have no effect on the status of participating veterinary surgeries and customer members of the POTB Pets Club. She was unable to say whether or not the discount rates available to members on certain POTB products would now extend to the Pets Pyjamas site. Copyright 2000 Steve O'Malley (UKPets). This article may be reproduced with permission of the author and correct attribution to the source. Statement Source Pets Pyjamas Limited.