Hardware wholesaler True Value filed for bankruptcy on Monday and plans to sell its company to its largest competitor, Do It Best, for $153 million.
True Value, which has been in business for 75 years and sells hardware, tools, lumber, plumbing and heating supplies as well as other home improvement items, says the stores are independently owned and not part of the bankruptcy process.
True Value, founded in 1948, has said it will continue to supply products to its 4,500 locations.
True Value operates as a member-owned wholesale cooperative that sells its products primarily to hardware retailers, garden centers, industrial distributors and other merchants.
Hardware wholesaler True Value filed for bankruptcy on Monday and wants to sell its company to competitor Do It Best for $153 million
The Chicago, Illinois-based company has between $500 million and $1 billion in total debt, according to its Chapter 11 petition in Delaware bankruptcy court.
The Chicago, Illinois-based company has between $500 million and $1 billion in total debt, according to its Chapter 11 petition in Delaware bankruptcy court, viewed by Fox Business.
Fort Wayne, Indiana-based Do It Best agreed to act as a stalking horse bidder on True Value’s assets, meaning True Value remains open to higher bids.
“After a thorough review of strategic alternatives, we determined that selling our business was the path forward to maximize value and best serve our retail partners and other stakeholders going forward,” said Chris Kempa, CEO of True Value.
‘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 field and also operates with a focus on supporting members and helping them grow, is the most beneficial next step is for True Value and our employees, customers and supplier partners,” Kempa added.
Do It Best has agreed to pay $153 million in cash, assume about $45 million in contracts and other obligations, and hire some True Value employees by the end of the year.
Fort Wayne, Indiana-based Do It Best agreed to act as a stalking horse bidder on True Value’s assets, meaning True Value remains open to higher bids
True Value has been in business for 75 years, selling hardware, tools, lumber, plumbing and heating supplies and other home improvement items
“A successful acquisition of True Value assets would mark a strategic milestone for Do it Best and home improvement retailers around the world,” said Dan Starr, president and CEO of Do it Best.
‘Do it Best has a proven track record of driving profitability through the most efficient operations in the industry.
“This acquisition, if completed, would provide True Value and independent hardware stores with the strongest growth opportunities in the coming years,” Starr said.
The number of commercial bankruptcies has increased by 20 percent in 2024 compared to the same period last year.
More than 22,550 companies have sought protection from creditors.
Major corporations have also failed: 113 companies with more than $100 million in assets have filed for Chapter 7 or Chapter 11 bankruptcy.
Among the factors companies cite for their demise are rising costs due to inflation and higher interest rates, along with the lingering effects of the pandemic.