True Value, an iconic wholesale hardware supply chain with 4,500 store locations, announced on Monday that the company had filed for Chapter 11 bankruptcy and had accepted an initial offer to sell its business to Do It Best, another hardware and lumber wholesale company.
In a statement released by the company, True Value CEO Chris Kempa wrote, “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.”
Fox Business reported that True Value’s Chapter 11 bankruptcy petition in Delaware’s bankruptcy court showed that the hardware company currently has between $500 million and $1 billion in total liabilities.
In Monday’s announcement, True Value indicated that its roughly 4,500 independently owned and operated retail stores are not part of the bankruptcy and that the company would continue to supply products to the independent retail stores.
READ MORE: Iconic company files for bankruptcy
Discussing the decision to sell the company to Do It Best, Kempa said, “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.”
According to Fox Business, Do It Best, which is based in Fort Wayne, Indiana, has agreed to be a “stalking horse” bidder for the company’s assets, which allows True Value to potentially consider higher offers from other companies. The outlet noted that as part of the tentative agreement, Do It Best has agreed to pay $153 million in cash, hire some of True Value’s current employees, and cover roughly $45 million in contracts and obligations for True Value.
Discussing the agreement, Do It Best CEO Dan Starr said, “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 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.”
According to The New York Post, the sale of True Value is expected to close with Do It Best by the end of the year if the company does not receive a better offer.
