Tractor Supply Acquires Petsense
Tractor Supply Co., the largest rural lifestyle retail store chain in the U.S., announced that it has acquired Petsense, a specialty retailer of pet supplies and services with 136 stores in 25 states. The transaction price was approximately $116 million. Petsense will operate as a subsidiary of Tractor Supply from Petsense's current Scottsdale, Arizona headquarters, 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 percent to 20 percent annually, and will convert Tractor Supply's two existing HomeTown Pet stores to Petsense stores.
Total Retail's Take: At first glance, Tractor Supply buying Petsense makes, well, no sense. However, Tractor Supply does have experience in the pet industry thanks to its two HomeTown Pet stores. The acquisition of the established, successful Petsense business will help Tractor Supply develop its pet specialty retail business instead of having to do it itself. And there's good reason to. The pet industry represents a $60 billion market, driven by favorable pet ownership trends and the continued humanization of pets by their owners. What's more, both companies have same small town values, which will make for a great culture fit. Additionally, Tractor Supply has the experience and resources needed to help expand Petsense to many untapped markets across the country. When you think about it that way, the acquisition does start to make "sense."