C
CasesCoach
English 简体中文 繁體中文 日本語 Deutsch
BCG Hard Merger & Acquisition Synergies Analysis

Pet Paws

#Retail #Pet Products #Technology

Practice this advanced merger & acquisition case interview question from BCG in the Retail sector. Includes detailed problem prompt, clarifying questions, structured framework, and expert recommendation. Part of CasesCoach's 835+ consulting case library.

CasesCoach Comment

This is a comprehensive M&A valuation case requiring candidates to build a detailed DCF model incorporating three revenue streams, calculate fixed and variable costs, and quantify synergies. The case tests both quantitative modeling skills (revenue build-up, EBIT calculations, valuation) and strategic thinking about market positioning and integration risks.

Estimated Time 36 minutes
Difficulty Hard
Source Duke
82 / 100
Your client is PawsPlus Retail, a national specialty retailer offering premium pet food, treats, supplements, toys, and grooming products through 430 stores and a fast-growing e-commerce business. The company is evaluating the acquisition of PetHub, a fast-growing direct-to-consumer subscription platform offering personalized pet nutrition boxes and tele-vet services.. PetHub is currently seeking a $2.8B valuation in a full acquisition offer from PawsPlus. PawsPlus has hired your team to determine should we acquire PetHub at its asking price?

Clarifying Information

  1. Goal: Client has been looking to make a successful acquisition for some time and wants to make sure this is the right move.
  2. Model: PetHub operates a high-growth DTC subscription model delivering personalized pet nutrition boxes, complemented by recurring tele-vet services and shoppable add-on products.
  3. Geography: Both the client and target company operate in US.
Mock Interview
Interviewer

Your client is PawsPlus Retail, a national specialty retailer offering premium pet food, treats, supplements, toys, and grooming products through 430 stores and a fast-growing e-commerce business. The company is evaluating the acquisition of PetHub, a fast-growing direct-to-consumer subscription platform offering personalized pet nutrition boxes and tele-vet services.. PetHub is currently seeking a $2.8B valuation in a full acquisition offer from PawsPlus. PawsPlus has hired your team to determine should we acquire PetHub at its asking price?

You

Thanks. Before analyzing, I'd like to clarify a few key questions...

Interviewer

Good question. Let me provide some background information...

You

Based on this, I suggest analyzing from these dimensions...

AI Score
Clarifying + Framework /5 Exhibits + Analysis /5 Brainstorm + Conclusion /5 Universal Skills /5
Practicing...
Score coming soon
AI Mock Interview

PawsPlus Retail is evaluating a $2.8B acquisition of PetHub, a DTC subscription platform. Candidates must analyze PetHub’s $1.8B revenue base (subscription boxes, tele-vet services, add-on products), calculate EBIT margins, apply a WACC discount rate, model synergy uplift of 500 bps, and recommend whether the acquisition represents fair value.

Key Insights:

  1. Revenue calculation requires understanding three distinct business segments with different unit economics and cost structures
  2. PetHub’s 40% active subscriber rate and 60% monthly churn are critical inputs that significantly impact revenue projections
  3. Synergies (cross-selling through 430 stores, shared fulfillment, lower CAC) directly impact valuation and should increase EBITDA margin from 10% to 15%
  4. Deal attractiveness hinges on integration risks (technology alignment, supply chain complexity) versus strategic need (PawsPlus’ stagnating in-store retail segment)
  5. Final valuation of $2.7B is extremely close to asking price of $2.8B, making this a borderline acquisition decision dependent on synergy confidence

Practice More Case Interview Questions

Browse 800+ real consulting case interview examples from top firms. Filter by difficulty, company, industry, or case type. Or try our AI mock interview for instant feedback and scoring.

Browse All Cases How to Practice Case Interviews
Train your judgment with AI