Hardware Retailer True Value Plans Sale To Rival After Bankruptcy Filing
Hardware wholesaler True Value Co. filed for Chapter 11 bankruptcy Monday, announcing it intends to accept a bid for its business from rival Do it Best Corp.
Do it Best offered $153M for True Value’s business operations, which serves 4,500 independently owned retailers. The offer is a stalking horse bid and would be subject to better offers if any were to materialize, Bloomberg reported.
“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.
True Value hired investment banking firm Houlihan Lokey Inc. in May to review its options as it stared down significant liquidity challenges, Bloomberg reported, citing True Value's Chapter 11 filing. The company has estimated liabilities of between $500M and $1B and assets between $100M and $500M, the filing states.
The acquisition would create a store network of more than 8,000 locations.
Chicago-based True Value will continue its operations under Chapter 11 protection and is seeking to use its cash collateral, according to the company. Do it Best committed to providing incremental capital to fund True Value’s operations during the sale process if needed.
“Do it Best has a proven track record of driving profitability through the most efficient operations in the industry,” Do it Best President and CEO Dan Starr said in a statement. “This acquisition, if consummated, would provide True Value and independent hardware stores the strongest opportunities for growth for years to come.”
Inflation has impacted household spending on discretionary goods in the U.S., leading home, clothing and hobby stores to top the list of distressed retailers, according to Moody’s Ratings, Bloomberg reported.
True Value Co. has been in business for 75 years. Along with its international network of 4,500 stores, it operates 13 regional distribution centers and employs about 2,500 people.
In 2022, True Value acquired Agway Farm & Home Supply as well as Majic, The Yenkin-Majestic Paint Corporation's consumer paint division. In 2018, private equity firm Acon Investments bought a stake in True Value.
Do it Best Corp. is a member-owned hardware, lumber and building materials cooperative headquartered in Fort Wayne, Indiana. Formerly known as Hardware Wholesalers, its annual sales are near $5B, according to the company.
