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(Bloomberg) — BC Partners has agreed to sell a minority stake in PetSmart to Apollo Global Management Inc., having shelved plans to take the North American pet retailer public last year. 

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London-based BC Partners will retain a majority holding in PetSmart alongside Singaporean sovereign fund GIC Pte and the company’s management, according to a statement reviewed by Bloomberg News. Financial details weren’t disclosed.

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The global pet care market is projected to grow from $320 billion to almost $500 billion by 2030, according to estimates from Bloomberg Intelligence, and private equity firms are keen to gain exposure to the sector. In 2021, Hellman & Friedman and EQT AB teamed up to acquire Germany’s Zooplus AG, while last month EQT agreed to buy UK veterinary drugmaker Dechra Pharmaceuticals.

Volatile public markets and tightened deal financing in a higher interest rate environment, though, are complicating private equity firms’ efforts to exit holdings via initial public offerings or sales, leading them to explore more innovative ways to monetize assets and return capital to increasingly risk-averse investors.

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BC Partners led a consortium that purchased PetSmart in 2015 in an $8.7 billion deal. Revenue at the company, which operates more than 1,660 stores across the US, Canada and Puerto Rico, has risen more than 40% since then.

It hasn’t all been smooth sailing. In 2017, BC Partners added online pet store Chewy Inc. to the business in an acquisition that increased PetSmart’s debt levels and led to wrangling with creditors. 

The private equity firm later tried to carve out PetSmart’s remaining stake in Chewy, which went public in 2019, in a recapitalization deal but investors didn’t buy into the plan. Last year, it was considering taking PetSmart public via a blank-check company backed by KKR & Co. A deal ultimately didn’t materialize.

BC Partners is one of Europe’s oldest and best-known private equity investors. The firm overhauled its leadership last year after raising its latest flagship fund. It’s been busy looking for ways to return money to investors, including through the potential sales of UK-based veterinary services firm VetPartners and German pharmaceutical contract manufacturer Aenova, Bloomberg News has reported. 

UBS Group AG advised Apollo on the PetSmart investment, while JPMorgan Chase & Co. worked with BC Partners.

—With assistance from Kamaron Leach.