Investment firm KKR buys Mills Fleet Farm chain

One of the country’s largest investment firms, KKR of New York, is acquiring the family-owned Midwestern retailer Mills Fleet Farm, both companies announced Tuesday.

KKR has holdings in various industries totaling about $100 billion. It planned to operate Mills Fleet Farm independently of its other retailers, including Toys R Us, US Foods and Channel Control Merchants, executive Nate Taylor said in a statement. Terms of the purchase agreement have not been disclosed.

Mills Fleet Farm, founded in 1955 by Stewart Mills Sr., along with his sons Henry Mills II and Stewart Mills Jr., is headquartered in Brainerd , Minn., and operates 35 stores in rural communities and suburbs in Minnesota, Wisconsin, Iowa and North Dakota - including a store in Plymouth. Its merchandise includes hunting, fishing and sporting goods, as well as clothing and farm animal supplies.

The Mills sons, co-presidents in their 80s, said in a statement that they decided to “partner’’ with KKR so the company would be poised for “the next level of growth for the future.’’

The Mills put the company up for sale last fall. Stewart Mills III, the founder’s grandson, told the Brainerd Daily Dispatch at the time that the retailer needed deeper pockets in order to add stores and update it distribution network and warehouse.

In December, Reuters New Service reported that KKR was in the lead to acquire Mills Fleet Farm for more than $1.2 billion, prevailing over other equity firms in an auction for the privately-held company.

“We took great care in our approach to finding the right partner who shared our values and would preserve the legacy the Mills family has built after serving the Midwest over the last 60 years,’’ the sons of the founder said in Tuesday’s statement. “We truly believe KKR is the best fit for our organization and also the best fit for our employees.’’

Taylor, who runs the retail businesses within KKR’s private-equity portfolio, said that while KKR has acquired majority control of the stock, the Mills family will retain a small ownership stake in the company. Several Mills family members are expected to maintain offices and contribute as advisers.

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.

Mills Fleet Farm is not to be confused with Blain’s Farm and Fleet, the Janesville-based retailer that remains family owned and operates stores in Wisconsin, Illinois and Iowa.

While the two companies share similar store formats and names, they were formed independent of each other and were not formed as a result of a family feud or divorce settlement, contrary to urban legend, said Kristin Mickelson, PR/events manager at Blain’s Farm and Fleet.

“There was no split, no divorce,” Mickelson said. Blain’s Farm and Fleet was founded in 1955 by Claude and Bert Blain. The company is now owned and operated by Bert’s daughter, Jane Blain Gilbertson.

From the Associated Press

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