Lowe's Companies (NYSE: LOW ) on Friday confirmed that it has completed its previously announced acquisition of the majority of assets from Orchard Supply Hardware, in particular its acquisition of 72 Orchard stores, for approximately $205 million in cash plus assumption of Orchard's accounts payable to its suppliers.
Lowe's said it intends to operate Orchard as a stand-alone business, retaining both its brand name and its San Jose, Calif., headquarters. In a statement, Lowe's explained that "Orchard's smaller-format neighborhood stores ... are a natural complement to Lowe's strengths in big-box retail" in California. Located in high-density, prime locations that are difficult for 100,000-plus-square-foot home improvement stores like Lowe's to enter, Orchard's 36,000-square-foot neighborhood stores focus on selling paint, repair supplies, and backyard equipment.
"Orchard is well-positioned within the California marketplace, with a strong brand, loyal customers and significant opportunity to benefit from the economic recovery," said Lowe's business development executive and president of Orchard, Richard D. Maltsbarger.