Press release from Business Wire
Lowe's Companies Completes Acquisition of 72 Orchard Supply Hardware Stores
Friday, August 30, 2013
Lowe's Companies Completes Acquisition of 72 Orchard Supply Hardware Stores09:35 EDT Friday, August 30, 2013
MOORESVILLE, N.C. (Business Wire) -- Lowe's Companies, Inc. (NYSE:LOW), the world's second largest home improvement retailer, today announced the completion of its previously announced acquisition of the majority of assets of Orchard Supply Hardware, including 72 Orchard stores, for approximately $205 million in cash, plus the assumption of payables owed to nearly all of Orchard's supplier partners. Orchard will continue to operate as a separate, standalone business, retaining its brand and its San Jose headquarters.
The acquisition expands Lowe's presence in California through the addition of Orchard's smaller-format neighborhood stores, which are a natural complement to Lowe's strengths in big-box retail.
“We look forward to a smooth transition and to continuing the successful repositioning strategy already underway to take full advantage of Orchard's growth potential,” said Richard D. Maltsbarger, Lowe's business development executive and president of Orchard. “Orchard is well-positioned within the California marketplace, with a strong brand, loyal customers and significant opportunity to benefit from the economic recovery. We are confident Orchard has a bright future as part of Lowe's.”
Located in high-density, prime locations that are difficult for larger format retailers to enter, Orchard's smaller-format neighborhood stores offer a product selection focused on paint, repair and backyard categories in approximately 36,000 square feet of selling space, compared to 113,000 square feet of selling space for an average Lowe's home improvement store.
Goldman Sachs acted as financial advisor to Lowe's, while Hunton & Williams LLP acted as legal advisor.
With fiscal year 2012 sales of $50.5 billion, Lowe's Companies, Inc. is a FORTUNE® 100 company that serves approximately 15 million customers a week at more than 1,825 home improvement and hardware stores in the United States, Canada and Mexico. Founded in 1946 and based in Mooresville, N.C., Lowe's is the second-largest home improvement retailer in the world. For more information, visit Lowes.com.
Disclosure Regarding Forward-Looking Statements
This news release includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Act”). Statements of the Company's expectations for sales growth, comparable sales, earnings and performance, shareholder value, capital expenditures, cash flows, the housing market, the home improvement industry, demand for services, share repurchases, the Company's strategic initiatives and any statement of an assumption underlying any of the foregoing, constitute “forward-looking statements” under the Act. Although we believe that the expectations, opinions, projections, and comments reflected in these forward-looking statements are reasonable, we can give no assurance that such statements will prove to be correct. A wide variety of potential risks, uncertainties, and other factors could materially affect our ability to achieve the results either expressed or implied by our forward-looking statements including, but not limited to, changes in general economic conditions, such as continued high rates of unemployment, interest rate and currency fluctuations, higher fuel and other energy costs, slower growth in personal income, changes in consumer spending, changes in the rate of housing turnover, the availability and increasing regulation of consumer credit and of mortgage financing, inflation or deflation of commodity prices, and other factors which can negatively affect our customers, as well as our ability to: (i) respond to adverse trends in the housing industry, such as the psychological effects of lower home prices, and in the level of repairs, remodeling, and additions to existing homes, as well as a general reduction in commercial building activity; (ii) secure, develop, and otherwise implement new technologies and processes designed to enhance our efficiency and competitiveness; (iii) attract, train, and retain highly-qualified associates; (iv) manage our business effectively as we adapt our traditional operating model to meet the changing expectations of our customers; (v) to maintain, improve, upgrade and protect our critical information systems; (vi) respond to fluctuations in the prices and availability of services, supplies, and products; (vii) respond to the growth and impact of competition; (viii) address changes in existing or new laws or regulations that affect consumer credit, employment/labor, trade, product safety, transportation/logistics, energy costs, health care, tax or environmental issues; and (ix) respond to unanticipated weather conditions that could adversely affect sales. In addition, we could experience additional impairment losses if the actual results of our operating stores are not consistent with the assumptions and judgments we have made in estimating future cash flows and determining asset fair values. Additionally, the following factors, among others, could cause actual results, financial results and timing of certain events to differ materially from those described in forward-looking statements: failure of the proposed transaction to be implemented; the challenges and costs of closing and integrating operations; the ability to retain key employees of the target company; and risks inherent in seeking regulatory and judicial approval of the transaction. For more information about these and other risks and uncertainties that we are exposed to, you should read the “Risk Factors” and “Critical Accounting Policies and Estimates” included in our Annual Report on Form 10-K to the United States Securities and Exchange Commission (the “SEC”) and the description of material changes therein or updated version thereof, if any, included in our Quarterly Reports on Form 10-Q.
The forward-looking statements contained in this news release are based upon data available as of the date of this release or other specified date and speak only as of such date. All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf about any of the matters covered in this release are qualified by these cautionary statements and the “Risk Factors” included in our Annual Report on Form 10-K to the SEC and the description of material changes, if any, therein included in our Quarterly Reports on Form 10-Q. We expressly disclaim any obligation to update or revise any forward-looking statement, whether as a result of new information, change in circumstances, future events, or otherwise.
Lowe?s Companies, Inc.
Tiffany Mason, 704-758-2033
Karen Cobb, 704-758-3504