Home improvement retailer Lowe’s Companies has agreed to buy the majority of assets of Orchard Supply Hardware, including 72 stores in California, for approximately $205m.
The retailer had submitted a bid to purchase the majority assets of Orchards through Bankruptcy Court-supervised auction and has also agreed to assume a debt owed to supplier partners.
The acquisition is said to be a part of Lowe‘s strategy to strengthen its retail presence across the state of California, where it currently operates 110 stores.
Earlier in June 2013, both the companies had entered into a purchase agreement, which will be served as stalking-horse bid.
Lowe’s chairman, president and CEO Robert Niblock said that the company is pleased with the progress of the acquisition process.
"Orchard’s hardware and garden stores have a loyal customer base and are situated in high-density, prime locations that are difficult for larger format retailers to enter," added Niblock.
"We see significant potential for Orchard as a standalone business within Lowe’s portfolio, and we look forward to the opportunity to participate more fully in California’s economic recovery."
Currently subject to Bankruptcy Court approval, the transaction is expected to be completed by the end of August 2013.
Lowe’s operates more than 1,750 home improvement stores in the US, Canada and Mexico.