Tractor Supply Company has announced the acquisition of Missouri-based Orscheln Farm and Home stores for $297 million in an all-cash deal that affects 167 stores in 11 states including Arkansas, Kansas and Oklahoma.
Moberly, Mo.,-based Orscheln Farm and Home has been a family-owned business for six decades selling farm and ranch products to consumers in the Midwest. Tractor Supply estimates the acquisition will be immediately accretive to earnings per share upon closing, with the earnings accretion is anticipated to grow over time as planned synergies are achieved.
“This is an exciting step for Tractor Supply as we expand our footprint in the Midwest with the high-quality assets of Orscheln Farm and Home,” said Hal Lawton, president and CEO of Tractor Supply. “We have always had great respect for Barry Orscheln and the team at Orscheln Farm and Home for the strong connection they have with customers in the communities they serve, along with their industry knowledge and capabilities. We look forward to bringing together our highly complementary cultures and teams to realize the long-term value and benefits that we expect this acquisition to deliver.”
Brentwood, Tenn.-based Tractor Supply operated 1,923 stores in 49 states at the end of 2020. The chain also owns 182 Petsense stores located in 25 states. The Orscheln deal will help Tractor Supply grow its local footprint with stores in Jane, Mo., and Springdale in addition to its namesake stores in Bentonville, Springdale, Siloam Springs and Farmington and Grove, Okla.
Raymond James analyst Bobby Griffin reiterated a “buy” rating on the stock this week with a price target of $175, saying the acquisition is “strategically sound and fits well with the company’s long-term vision and market share opportunity.”
Tractor Supply has a market capitalization of $19.94 billion with annual sales of $10.6 billion. Shares of the company (NASDAQ: TSCO) closed Friday at $171.34 on Friday, down 3 cents. Tractor Supply shares are up 74% from a year ago.