Hardware wholesaler True Value Co. has struck a buyout deal with co-operative Do It Best Corp. with True Value filing for Chapter 11 bankruptcy protection to facilitate a process that would combine 4,500 True Value-affiliated stores with the Do It Best’s 4,300 store system.
Do It Best becomes a stalking horse bidder in the True Value Chapter 11 proceedings occurring in the United States Bankruptcy Court for the District of Delaware. True Value will continue day-to-day operations, serving its network of independently owned hardware and home goods retailers. True Value stores (with the exception of one company-owned store in Palatine, IL) are independent businesses and not part of the bankruptcy proceedings.
True Value called the sale process the next step beyond actions the company already has taken in 2024 to better position the business and its iconic brand for the long term, including modernizing legacy operations, driving greater efficiencies and investing in additional marketing efforts.
The acquisition deal provides a significant cash consideration and meaningful assumption of liabilities related to the ongoing True Value business, the company stated. As such, its bankruptcy filing includes the requested designation of Do it Best as the stalking horse bidder even as it initiates a competitive bidding process under Section 363 of the Bankruptcy Code designed to achieve the highest or otherwise best value for the True Value assets. To support the day-to-day business through the buyout process, True Value is seeking court permission to use its cash collateral to fund operations. To the extent True Value requires additional financing during the process, it has received a commitment from Do it Best to provide incremental capital.
“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 Chris Kempa, True Value’s CEO. “We believe that entering the process with an agreed offer from Do it Best, which 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.”
Dan Starr, Do it Best president and CEO, added. “A successful acquisition of True Value assets would represent a strategic milestone for Do it Best and home improvement retailers. 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.”
