(WJET/WFXP) — True Value, a well-known home improvement company, entered into a sale agreement Monday morning after filing for Chapter 11 bankruptcy.
The Chicago-headquartered company entered an agreement with Do It Best. According to the bankruptcy filing, the 75-year-old company has $500 million to $1 billion in liabilities to over 1,000 creditors while claiming $100 million to $500 million in assets.
All stores will remain open, with business remaining unaffected since the stores, except for one company-owned store in Palatine, Illinois, are independently owned and not directly a part of the Chapter 11 filing.
True Value has an international network of over 4,500 independently owned and operated stores.
True Value has requested court approval to continue its current customer programs, including its direct ship program, rebate program, warranties program, rewards and loyalty programs and gift card programs.
“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,” True Value CEO Chris Kempa said in a statement. “We thank these valued stakeholders for their continued loyalty as we work to secure a stronger future for True Value.”
As part of the Chapter 11 filing, Do It Best will become the lead bidder, or “stalking horse” bidder. The initial offer consists of a $153 million cash purchase price and the assumption of certain liabilities. This establishes the minimum for the bidding, and if no better offer is submitted, Do It Best’s bid will be declared the winner.
“This acquisition, if consummated, would provide True Value and independent hardware
stores the strongest opportunities for growth for years to come,” Do it Best President and CEO Dan Starr said in a statement.
True Value has secured just over $15 million in funding to maintain its operations during the bidding process, which is expected to be completed by the end of the year.
This announcement comes just over six months after Do It Best approved a merger with United Hardware, a Midwest-based wholesale hardware distributor known for the “Hardware Hank” brand. According to an April news release, over 700 United Hardware locations maintained their independent brand locations during the merger.
Do It Best, based in Fort Wayne, Indiana, is a member-owned home improvement cooperative. The company has annual sales of nearly $5 billion serving thousands of member-owned locations across the U.S. and more than 50 other countries.