(Gray News) – A storied hardware company has decided to sell itself to a rival, but to facilitate the sale, it must declare Chapter 11 bankruptcy.
True Value, a 75-year-old brand headquartered in Chicago, started Chapter 11 bankruptcy proceedings amid an agreement to sell itself to Do It Best Corp., the chain said Monday.
The company said it will continue its day-to-day operations providing products to its 4,500 independently owned stores, which will stay open. Only one True Value store is company-owned.
“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,” said True Value Chris Kempa. “We thank these valued stakeholders for their continued loyalty as we work to secure a stronger future for True Value.”
Do It Best is bidding $153 million on the company, according to legal filings. It’s also agreed to assume certain liabilities.
True Value is requesting designation of Do It Best as a “stalking horse” or lead bidder in the bidding process as the chain goes up for sale as part of the bankruptcy proceeding, and is getting funds from Do It Best.
The company’s first-day bankruptcy motions included requests to continue to pay and provide benefits for its employees.
True Value said it hopes to complete the sale process by the end of the year.
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