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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowChicago-based True Value Co. LLC on Monday began voluntary Chapter 11 bankruptcy proceedings, with the goal of selling its business operations to Fort Wayne-based Do It Best Corp.
True Value said in a bankruptcy filing that it has entered into an agreement with Do It Best, whereby the company will serve as a stalking horse bidder for True Value’s assets, with an initial cash offer of $153 million and the assumption of up to $45 million in additional liabilities.
True Value serves 4,500 independently owned hardware retailers and has stores in more than two dozen Indiana communities. There are two True Value stores in Indianapolis: Fusek’s True Value at 350 E. New York St. and Fusek’s True Value East at 9501 E. Washington St.
CEO Chris Kempa said in a news release that the decision to sell followed a “thorough evaluation of strategic alternatives” and represented the best path forward to “maximize value and best serve our retail partners and other stakeholders into the future.”
“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 said.
True Value noted in the filing that it has secured more than $15 million to continue operations during the bidding process, which is slated to continue until Nov. 18.
Do It Best is the largest private company in Indiana with more than $5 billion in annual revenue, according to IBJ research. The member-owned hardware, lumber and building materials cooperative has nearly 1,700 total employees, including about 470 in the Hoosier State.
“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 the release. “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.”
True Value noted that because its stores are independently owned, they are not part of the Chapter 11 proceedings, with the exception of one company-owned store in Palatine, Illinois.
The company said it expects to complete the sale process by the end of the year.
The deal comes about six months after Do It Best announced a merger with Minnesota-based wholesale hardware distributor United Hardware.
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Pat Summerall is rolling in his grave right now.