Tractor Supply Acquisition Of Orscheln Farm And Home Receives FTC Approval

Tractor Supply Company announced this evening that the Federal Trade Commission has approved their acquisition of Orscheln Farm and Home.

The company is expected to close on the acquisition as early as Wednesday, October 12.

The FTC approval came with a catch in that Tractor Supply could only retain 81 stores and 85 remaining Orscheln Farm and Home Stores will be divest between two buyers identified as Bomgaars, an Iowa-based store chain and Bucheit.

Locally, the Sullivan Orscheln Farm and Home along, with Washington Orscheln Farm and Home as well as Troy Orscheln Farm and Home will become Bomgaars stores, while the Owensville, Pacific Orschlel Farm and Home stores will remain with Tractor Supply.

Tractor Supply is one of the leading rural lifestyle retailers whose footprint now expands more in the midwest following the acquisition going from 2,100 stores to 2,800.

The Sullivan Independent News will have more on this developing sale in next week’s issue.

Press Release

Tractor Supply Company (NASDAQ: TSCO), the largest rural lifestyle retailer in the United States, announced today that it received clearance from the Federal Trade Commission (“FTC”) to close on its previously announced acquisition of Orscheln Farm and Home. The closing of the acquisition is anticipated to be completed on October 12, 2022. The Company will acquire a net 81 stores and divest the remaining 85 stores to two buyers approved by the FTC. The net purchase price of the 81 stores acquired and retained is approximately $238 million before working capital adjustments. The acquisition is anticipated to generate an estimated future tax benefit of approximately $20 million.

“Today is an important day for Tractor Supply as this acquisition expands our ability to better serve our customers in the Midwest. We are committed to providing customers in the region with an elevated product assortment, a meaningful loyalty offering, an enhanced digital shopping experience and so much more that Tractor Supply is able to offer,” said Hal Lawton, Tractor Supply’s President and Chief Executive Officer. “Importantly, Tractor Supply is on track to achieve several monumental milestones in the growth of our company including annual revenues in excess of $14 billion, a store base of over 2,100 Tractor Supply locations and a highly engaged workforce of 50,000 Team Members. We are excited to build on our track record of long-term growth as we look to unlock revenue and earnings opportunities with this attractive acquisition that enhances our growth profile.”

Lawton continued, “While agreeing to this remedy with the FTC took longer than we anticipated, the outcome is in line with our expectations. We are very pleased with the high-quality locations that will be converted to Tractor Supply stores. I want to thank the Team Members from both companies for their contributions and focus on caring for our customers during the extended review with the FTC. With a shared culture and values, we are excited to welcome the team to Tractor Supply and look forward to an exciting future going forward. We are honored to build on the legacy of Barry Orscheln and the team.”

Financial Terms of the Acquisition

The deal is an all-cash transaction that Tractor Supply anticipates financing through its balance sheet. The Company will acquire 166 Orscheln Farm and Home stores for approximately $320 million, before working capital adjustments. As part of the remedy reached with the FTC, Tractor Supply will divest 85 locations to two buyers, Bomgaars Supply, Inc. (73 stores) and Buchheit Enterprises, Inc. (12 stores), shortly after closing the transaction. Proceeds of the store divestitures will be approximately $72 million. In addition, Tractor Supply has agreed to sell the Orscheln Farm and Home corporate headquarters and distribution center to Bomgaars for approximately $10 million within 15 months after the closing of the transaction.

The store divestitures and sale of the corporate headquarters and distribution center bring the net purchase price of the 81 stores acquired to approximately $238 million, before working capital adjustments. The acquisition is anticipated to generate an estimated future tax benefit of approximately $20 million.