BC Partners to Split PetSmart, Chewy in $6 Billion Recap Deal

Three years after saddling PetSmart Inc. with debt to acquire online rival Chewy Inc., a group led by private equity firm BC Partners is splitting them in two, betting that the companies will be better off on their own.

The group plans to recapitalize PetSmart with $1.3 billion of equity and $4.65 billion of debt raised from institutional money managers, according to credit grading firms and documents released to investors.

All of PetSmart’s remaining shares in Chewy will be distributed to the BC Partners-led group, which will operate the fast-growing but unprofitable online retailer as a wholly separate business. ...