The acquisition of BarkBox by a blank-check company is expected to raise $454 million.
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BarkBox Inc., a startup best known for its monthly subscription service for dogs, is merging with a blank-check company in a $1.6 billion deal, including debt, according to people familiar with the matter.
The acquisition by Northern Star Acquisitions Corp., which is expected to raise $454 million, could be announced as soon as Thursday, they said.
The deal seeks to capitalize on a pandemic-fueled rise in pet adoptions and pet-related spending that led Petco Animal Supplies Inc. to file for an initial public offering, and pushed online pet-supply store Chewy Inc.’s latest quarterly sales up 45% year-over-year.
Spending on gifts for pets are up 21% this year compared with 2019, a bigger jump than spending on gifts for humans, according to a recent report by PricewaterhouseCoopers LLP.
BarkBox is the latest in a string of trendy companies using special purpose acquisition companies, or SPACs, to go public. This year has been the busiest for the vehicle, according to data provider SPACInsider.
SPACs are public companies formed for the sole purpose of acquiring other companies to take public. Startups using SPACs to go public frequently disclose their growth expectations—a practice that is constrained in the traditional IPO process.
Founded in 2012, BarkBox is a dog-focused supply company selling food, toys, treats, accessories and dental products through monthly subscription boxes, an e-commerce site and traditional retailers such as Target Corp. and Petco. It expects to reach $365 million in revenue for the fiscal year ending March 31.
The new round of funding will be used to push the company’s expansion overseas and boost new and existing product lines, the people said. The BarkBox service has more than one million active monthly subscribers.
Earlier this year, the New York company hired former Amazon.com Inc. executive Manish Joneja to take over as its chief executive. The investors behind North Star include former publishing executive Joanna Coles and Jon Ledecky, majority owner of the New York Islanders.
Write to Charity L. Scott at [email protected]
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Appeared in the December 17, 2020, print edition as ‘Pet-Food Startup BarkBox Bought in SPAC Deal.’
