The purchase price for Del's was undisclosed, althoughthe company generated about $34 million in sales in2004. Tractor Supply says the acquisition would beneutral to earnings in 2005 and slightly accretive in2006, but didn't offer any specifics.
"Del's is a wonderful small company," says Jim Wright, president and CEO of Tractor Supply Co. "We're pretty far down the road on due diligence (for the acquisition)." He adds that the bringing Del's into Tractor Supply is "on-strategy and on-category," meaning that the company is a good fit with Tractor Supply, which owns and operates 547 stores in 34 states. Specifically, Del's gives Tractor Supply an entry into Washington, where Del's has 14 stores and Tractor Supply has none.
Del's operates 17 stores, primarily in the PacificNorthwest, offering products for those who have arural lifestyle. The chain specializes in the animal and pet category, which accounts for about 70% of its sales. Currently, animal and petproducts account for only 30% of Tractor Supply's sales.
Wright says that Tractor Supply will continue tooperate Del's stores under the Del's Farm Supplybrand. He anticipates that Del's existing managementteam will stay on once the acquisition is completed."The management team at Del's is very entrepreneurial;we're excited and energized by their passion," Wrightsays.
A typical Del's store is significantly smaller than aTractor Supply. Del's stores require 1.25 acres ofland, an 8,400-sf building and an additional 5,000-sfshed. "Del's gives us a significant opportunity toenter smaller markets and fill in markets where we haveTractor Supply," Wright says.
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