True Value company enters sale agreement, initiates Chapter 11 proceedings
Chicago-based True Value Company, L.L.C., a leading hardware and durable goods wholesaler, has entered into an agreement to sell substantially all of the company’s business operations to home improvement industry peer Do it Best Corp.
To complete the sale, True Value and some of its affiliates initiated voluntary Chapter 11 proceedings in the U.S. Bankruptcy Court for the District of Delaware, according to a company press release.
True Value will continue day-to-day operations serving 4,500 independently owned retailers globally that provide the 75-year-old brand’s products and expertise.
True Value stores are independently owned and are not a part of the Chapter 11 proceedings, with the exception of the company-owned store in Palatine. An employee at the Palatine location declined to comment on the company’s sale and bankruptcy announcement at this time.
“After a thorough evaluation of strategic alternatives, we determined that the sale of our business was the path forward to maximize value and best serve our retail partners and other stakeholders into the future,” said Chris Kempa, True Value’s chief executive officer. “We believe that entering the process with an agreed offer from Do it Best, who has a similar decades-long history in the home improvement space and also operates with a focus on supporting members and helping them grow, is the most beneficial next step for True Value and our associates, customers, and vendor partners. We thank these valued stakeholders for their continued loyalty as we work to secure a stronger future for True Value.”
True Value’s sale process is the next step in a series of actions the company has taken this year to better position the business and its iconic brand for the long term, including modernizing its legacy operations, driving greater efficiencies, and investing in additional marketing campaigns, according to the release.
“A successful acquisition of True Value assets would represent a strategic milestone for Do it Best and home improvement retailers around the world,” said Dan Starr, Do it Best president and chief executive officer. “Do it Best has a proven track record of driving profitability through the most efficient operations in the industry. This acquisition, if consummated, would provide True Value and independent hardware stores the strongest opportunities for growth for years to come.”
The agreement with Do it Best provides significant cash consideration and meaningful assumption of liabilities related to the ongoing business. True Value is requesting designation of Do it Best as the “stalking horse,” or lead, bidder and to initiate a competitive bidding process under Section 363 of the Bankruptcy Code designed to achieve the highest or best value for the company.
True Value will use its cash collateral to fund day-to-day operations. If additional financing is needed, the company has received a commitment from Do it Best to provide incremental capital.
True Value also is filing a series of customary motions with the court seeking to uphold its commitments to its stakeholders during the sale process. That would allow the company to continue to pay wages and provide benefits to associates and offer essential customer programs. The company anticipates paying vendors for authorized goods received and services rendered after the filing, according to the release.
The sale is expected to be complete by year end.