Tractor Supply Company, the largest rural lifestyle retailer in the United States, announced today that it received clearance from the Federal Trade Commission 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 of 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 into 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.

Financial Details and Outlook

Additional transaction highlights include:

• For the fourth quarter and fiscal 2022, the revenue from the acquisition is anticipated to add about $75 million to Tractor Supply’s net sales. Given the transaction expenses and early implementation costs to be recorded in the fourth quarter of 2022, the impact of the acquisition is expected to be relatively neutral to operating income in the quarter and for the year.
• For fiscal 2023, the revenue from the acquisition is anticipated to add at least $300 million to Tractor Supply’s net sales and be accretive by at least $0.10 to diluted earnings per share. This considers anticipated integration expenses that will partially offset accretion in year one of the acquisition.
• Over the course of the next 15 months post-closing, the stores retained by Tractor Supply will be remodeled to the Tractor Supply brand.
• The Company is raising its outlook for store growth opportunities to 2,800 locations, an increase of 100 stores.
• Post-closing, the Company estimates it will have annual revenues over $14 billion, more than 2,100 Tractor Supply stores and 50,000 Team Members.

Consistent with prior years’ convention, the Company will provide a comprehensive financial outlook for the coming fiscal year in conjunction with its fourth quarter 2022 earnings release on Thursday, January 26, 2023. Tractor Supply Company will release its third quarter 2022 earnings release before the market opens on Thursday, October 20, 2022. The Company will hold its third quarter 2022 earnings conference call that day at 10:00 a.m. Eastern Time.

About Tractor Supply Company

Tractor Supply Company (NASDAQ: TSCO), the largest rural lifestyle retailer in the United States, has been passionate about serving its unique niche, targeting the needs of recreational farmers, ranchers, and all those who enjoy living the rural lifestyle, for more than 80 years. Tractor Supply offers an extensive mix of products necessary to care for homes, land, pets, and animals with a focus on product localization, exclusive brands, and legendary customer service for the Out Here lifestyle. With nearly 48,000 Team Members, the Company’s physical store assets, combined with its digital capabilities, offer customers the convenience of purchasing products they need anytime, anywhere, and any way, they choose at the everyday low prices they deserve. On June 25, 2022, the Company operated 2,016 Tractor Supply stores in 49 states, a consumer mobile app, and an e-commerce website at www.TractorSupply.com.