Tractor Supply (TSCO) to Acquire Petsense in Net $116M Deal

September 29, 2016 4:02 PM EDT

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Tractor Supply Company (Nasdaq: TSCO), the largest rural lifestyle retail store chain in the United States, today announced that it has acquired 100% of Petsense, LLC, a leading specialty retailer of pet supplies and services with 136 stores in 25 states. The transaction price was approximately $116 million, net of acquired estimated future tax benefits of $29 million. The acquisition was a cash transaction financed with cash-on-hand and revolver debt. The transaction, including transaction and integration costs, is not expected to be material to Tractor Supply's net earnings per diluted share for fiscal 2016.

Petsense will operate as a subsidiary of Tractor Supply Company from Petsense's current headquarters in Scottsdale, Arizona and will continue to be led by members of Petsense's senior management team. Tractor Supply plans to continue to grow the Petsense store base at a target rate of 15% to 20% annually and will convert its two existing HomeTown Pet stores to Petsense stores.

Greg Sandfort, Tractor Supply Company's Chief Executive Officer, stated, "We are excited about the addition of Petsense to the Tractor Supply family as we develop our pet specialty retail business. The pet industry represents a $60 billion market driven by favorable pet ownership trends and the continued humanization of pets by their owners. We believe the pet specialty industry is an attractive expansion opportunity and, with 136 stores across 25 states, we think Petsense is an excellent complement to our Tractor Supply retail operations."

Mr. Sandfort continued, "With Tractor Supply's success in the pet category and the knowledge gained from our HomeTown Pet stores, we determined that the acquisition of an established, successful concept with a proven track record of growth would be the best way to capitalize on the opportunities in the pet market. We believe the Petsense team's expertise in growing smaller format pet specialty stores combined with our proven expertise in the category as well as site selection and store growth, will enable us to accelerate the growth of our pet specialty retail business and enhance long-term shareholder value."

Bob Angstead, President and Chief Executive Officer of Petsense stated, "As we looked at the future for Petsense, we recognized Tractor Supply Company as a natural fit to continue our growth. The Tractor Supply team has a strong culture, and we share many of the same values, as well as an appreciation of the opportunities presented by smaller towns and communities. Additionally, the Tractor Supply team has the experience and resources to help expand Petsense to the many untapped markets across the country."

Peter J. Solomon Company acted as exclusive financial advisor and Bass, Berry & Sims PLC acted as legal advisor to Tractor Supply Company. William Blair & Company acted as exclusive financial advisor and Jenner & Block acted as legal advisor to Petsense.

Conference Call to Discuss Acquisition
Tractor Supply Company will host a conference call on September 29, 2016, at 5:00 p.m. Eastern Time to discuss the transaction, which will be broadcast simultaneously over the Internet on the Company's website at

Please allow extra time prior to the call to visit the site and download the streaming media software required to listen to the Internet broadcast.

A replay of the webcast will also be available at shortly after the conference call concludes.

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