Hardware Company True Value Declares Bankruptcy, Plans to Sell to Competitor
By Isabelle Durso October 15, 2024 5:19 pm
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Hardware store company True Value has filed for Chapter 11 bankruptcy and plans to sell its business to rival hardware chain Do It Best for $153 million, according to a petition filed in U.S. Bankruptcy Court in Delaware.
Chicago-based True Value, which works with independent hardware retailers and sells home improvement goods, began Chapter 11 proceedings after reporting between $500 million and $1 billion in total liabilities, court records show.
True Value announced the agreement Monday and said it will continue serving its 4,500 independently owned retail stores — which are not part of the bankruptcy proceedings — through the process.
“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,” True Value CEO Chris Kempa said in a statement.
“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.
Spokespeople for True Value and Do It Best did not immediately respond to requests for further comment.
Do It Best has agreed to serve as the stalking horse bidder in True Value’s sale, meaning any higher bids could potentially impact the final sale price, Reuters reported. Do It Best has already agreed to pay $153 million in cash, as well as an additional $45 million in other obligations, the outlet said.
The sale process is set to be completed by the end of this year, True Value 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 CEO Dan Starr said in a statement.
“Do It Best has a proven track record of driving profitability through the most efficient operations in the industry,” Starr added. “This acquisition, if consummated, would provide True Value and independent hardware stores the strongest opportunities for growth for years to come.”
The news comes amid a series of recent retail bankruptcies, including retailer LL Flooring, which shut down last month after filing for Chapter 11 in August, and fitness chain Blink Fitness, which started bankruptcy proceedings in August after reporting more than $280 million in debt.
But some retailers have managed to avoid shutting down completely, such as drugstore chain Rite Aid, which emerged from bankruptcy with a new CEO last month, and Red Lobster, which also emerged from bankruptcy last month and was acquired by new investors.
Isabelle Durso can be reached at idurso@commercialobserver.com.
