Major hardware supplier True Value has initiated Chapter 11 bankruptcy procedures and reportedly entered into an agreement to sell all of its operations to a rival chain, Do it Best Corp.
The Chicago-based retailer, which has 4,500 retail locations across the U.S. and internationally, filed in the U.S. Bankruptcy Court for the District of Delaware, company officials announced in a Monday press release.
“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 True Value CEO Chris Kempa.
He went on to say that the sale to Do it Best will be “beneficial” for the business and customers.
“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 said. “We thank these valued stakeholders for their continued loyalty as we work to secure a stronger future for True Value.”
The company wants to complete the sale by the end of 2024.
“A successful acquisition of True Value assets would represent a strategic milestone for Do it Best and home improvement retailers around the world,” Do it Best president and CEO Dan Starr added in a statement. “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.”
True Value has between $500 million and $1 billion in total liabilities, the bankruptcy petition obtained by Fox Business states.
The outlet noted that Do It Best, based in Fort Wayne, Indiana, entered the sale as a “stalking horse bidder,” meaning that other entities may still place higher offers.
The potential buyer has already agreed to hand over $153 million in cash, take on approximately $45 million in contracts and “other obligations,” and hire “some True Value employees,” Fox Business added.