Wholesale hardware supplier True Value has filed for Chapter 11 bankruptcy and is aiming to be sold by the end of the year to rival Do It Best.
True Value retail stores, which are independently owned and operated, are not part of the bankruptcy, and the wholesaler said it will continue to supply products to those 4,500 locations. The iconic brand has been around for 75 years.
True Value, which sells hardware, tools, lumber, plumbing and heating supplies, and other home improvement goods, has between $500 million and $1 billion in total liabilities, according to its Chapter 11 petition in Delaware bankruptcy court.
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"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 CEO.
"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," Kempa added.
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Fort Wayne, Indiana-based Do It Best agreed to serve as a "stalking horse" bidder for True Value's assets, which means that True Value remains open to higher offers. Do It Best agreed to pay $153 million in cash, take on about $45 million in contracts and other obligations, and hire some True Value employees.
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"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 CEO. "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."
Reuters contributed to this report.
