True Value Company LLC, a prominent hardware wholesaler based in Chicago, Illinois, has filed for Chapter 11 bankruptcy protection, seeking to sell its business to industry rival Do It Best for $153 million. The company, known for distributing hardware, tools, plumbing, heating supplies, and home improvement products, has faced significant financial challenges, leading it to this pivotal move.
In its bankruptcy petition, filed in Delaware bankruptcy court, True Value disclosed its liabilities, which range between $500 million and $1 billion. However, the company’s retail stores, which are independently owned, are not part of the bankruptcy proceedings, ensuring that the day-to-day operations of those stores remain unaffected during the transition.
Do It Best, based in Fort Wayne, Indiana, has agreed to act as the “stalking horse” bidder for True Value’s assets. This means that while Do It Best’s initial bid of $153 million in cash—along with taking on approximately $45 million in contracts and obligations—sets the baseline, True Value remains open to higher offers from other potential buyers.
The transaction, if approved, will also include the hiring of certain True Value employees, further ensuring continuity as the company undergoes its restructuring process.
Joseph Larkin of Skadden, Arps, Slate, Meagher & Flom LLP is representing True Value in the bankruptcy proceedings, which are being heard in the U.S. Bankruptcy Court for the District of Delaware (Case No. 24-12337).
True Value’s decision to file for bankruptcy marks a significant effort to streamline its operations and emerge as a more financially stable entity. As one of the largest hardware wholesalers in the U.S., the company’s move comes as it looks to overcome its financial obstacles while maintaining operations for its independent retailers. The company’s financial troubles, stemming from a combination of market conditions and internal challenges, prompted the restructuring decision.
The partnership with Do It Best, a key player in the hardware wholesaling space, will enable True Value to make strategic adjustments and possibly regain its competitive edge in the market.
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