BRAINERD, Minn. – Mills Fleet Farm has new ownership.
Tuesday morning, global investment firm KKR announced it is acquiring Mills Fleet Farm, a farm, home and outdoor retailer with 35 stores in Minnesota, Wisconsin, Iowa and North Dakota, including Fargo.
Mills Fleet Farm has its headquarters in downtown Brainerd.
Stewart Mills III, the grandson of the company's founder, declined to comment directly on the sale Wednesday, saying he was bound as an executive in the company by a confidentiality agreement until the sale closed. However, he pointed out a quote from KKR executive Nate Taylor in the KKR news release announcing the purchase agreement. Taylor stated KKR anticipates business growth-including additional jobs in Brainerd.
In October, Mills Fleet Farm reported it was seeking suitors for its company, which employs about 6,000 in the four states. The company's 36th store is currently under construction in Hermantown, Minn., with a planned 2016 opening.
ADVERTIsem*nT
Mills III said KKR's plans to expand the business while staying true to Fleet Farm's founding values satisfied the objectives the family wanted to accomplish by selling.
"That jives absolutely perfectly with what we started out as our stated goals," Mills III said Tuesday. "That was to find somebody that could bring Fleet Farm to the next level, somebody that had the deep pockets and the wherewithal to really take Fleet Farm where it needs to go. Underneath KKR's leadership, we believe they will do just that."
Mills III cited KKR's past acquisitions of Dollar General and Academy Sports as successful ventures that grew jobs. The outdoor retailer Academy Sports + Outdoors, which sells hunting and fishing equipment and outdoor goods, has been owned by KKR since 2011.
"That is one of the reasons why we chose KKR," he said. "We couldn't finance that out of our checkbook any longer, and we needed to look for outside sources of revenue. After the family had a chance to sit down and look at all of our options we had in front of us, we chose this being the best option."
In December, Reuters reported buyout firm KKR & Co. was in the lead to acquire Mills Fleet Farm for more than $1.2 billion, prevailing over other private equity firms in an auction for the privately held Mills Fleet.
Stewart Mills Sr., along with his sons, Henry Mills II and Stewart Mills Jr., founded Fleet Farm in 1955.
Mills III, who is running for Congress in the Eighth District, said he planned to resign from Fleet Farm when the sale closed. He did not identify how long it would take to close, but it "should be measured in several weeks rather than several months."
Financial terms were not disclosed.
ADVERTIsem*nT
When the company first announced it was seeking a buyer, Mills III said Fleet Farm reached a point where, in order to continue to grow at a speed to be competitive, it needed to look for outside sources for capital and couldn't continue to solely finance growth by itself. The next generation of the family, which would have represented the fourth generation in the family business, are still young children, Mills III noted.
Mills III said the company could sustain a much slower growth rate as it existed, but they were convinced Fleet Farm had greater business potential.
The company's warehouse and distribution system needed a significant upgrade requiring considerable capital investment, Mills III said. With that upgrade, Mills said he personally could see a growth of three or four stores annually.
Kohlberg Kravis Roberts & Co., or KKR, was founded in 1976. Henry Kravis and George Roberts are co-chairmen and co-CEOs, and KKR is a leading global investment firm with $78.3 billion in assets under management as of March 31, 2013.
Retired general and former CIA director David Petraeus was named chairman of KKR Global Institute in 2013.
KKR also has been active in North Dakota, partnering on a housing development in Williston, N.D.
The Mills Automotive Group, with 12 franchises, is not part of this transaction.
Mills Fleet Farm timeline
ADVERTIsem*nT
1922-Mills Company founded in Brainerd by Stewart C. Mills Sr. The company was founded when Mills purchased the Lively Auto Co. in Brainerd, which was selling Chevrolets and Hupmobiles. The company still has its headquarters in the Lively Building on Laurel Street in downtown Brainerd. That same year the wheel became the company symbol.
1923-Mills starts Crow Wing Oil Company.
1931-Mills opens Ford-Lincoln dealership in Brainerd.
1937-Mercury added to Mills Motor dealership.
1942-Second floor of the Lively Auto Co. converted to manufacturing to help in the war effort during World War II as the company manufactures adapter boosters.
1946-Mills brothers open Standard Parts Company stores. The company had stores in Brainerd, Little Falls and Crookston. The legacy continues as the Brainerd Standard Parts Co. store continues today as the NAPA store in Baxter.
1955-First Fleet Wholesale Supply opens in Marshfield, Wis. Stewart C. Mills and his sons, Stewart Jr. and Henry C. Mills II open the company to sell merchandise directly to farmers.
1959-Mills Properties is formed in Marshfield, Wis., as the general contractor for Mills Fleet Farm buildings and properties for store development.
ADVERTIsem*nT
1960-Fleet Wholesale Supply changes its name to Mills Fleet Farm.
1980-Five Mills Auto Service Centers open in Minnesota and Wisconsin.
1995-Mills Fleet Farm opens its first North Dakota store in Fargo. Mills opens its first Gas Mart and first car wash in Plymouth, Wis.
2000-The Fergus Falls store opens and becomes the first with the now readily recognized silo.
2002-Mills expands to Iowa, opening its first store in the state in Mason City. This store is the company's 29th.
2008-The Mills family, now in its third generation of family ownership, opens its 31st Fleet Farm store in Blaine.
2009-Fleet Farm goes online, offering store merchandise for sale from the company's website.
2015-Mills Fleet Farm announces it is seeking suitors for sale of the company.
ADVERTIsem*nT
2016-KKR and MIlls Fleet Farm report they have reached a purchase agreement to sell the Fleet Farm company and stores for an undisclosed amount.
Source: Mills Fleet Farm
