True Value Initiates Voluntary Chapter 11 Proceedings, Enters Sale Agreement with Do It Best

True Value Company, a hardlines wholesaler, entered into an agreement to sell substantially all of the company’s business operations to home improvement industry peer Do it Best._x000D_
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To complete the sale in the most efficient manner, True Value and certain of its affiliates initiated voluntary chapter 11 proceedings in the U.S. Bankruptcy Court for the District of Delaware. True Value will continue its day-to-day operations._x000D_
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“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,” Chris Kempa, CEO of True Value, said. “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. We thank these valued stakeholders for their continued loyalty as we work to secure a stronger future for True Value.”_x000D_
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“A successful acquisition of True Value assets would represent a strategic milestone for Do it Best and home improvement retailers around the world,” Dan Starr, president and CEO of Do it Best, said. “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.”_x000D_
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The agreement with Do it Best, which was reached following a robust marketing process, provides cash consideration and assumption of liabilities related to the ongoing business. The company is requesting designation of Do it Best as the “stalking horse,” or lead, bidder and to initiate a competitive bidding process under Section 363 of the Bankruptcy Code designed to achieve the highest or otherwise best value for the company. To support the day-to-day business through the sale, the company is seeking to use its cash collateral to fund operations. To the extent True Value requires additional financing during the process, the company has received a commitment from Do it Best to provide incremental capital._x000D_
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The company is also filing with the court a series of customary motions seeking to uphold its commitments to its stakeholders during the process. These “first day” motions include requests to continue to pay wages and provide benefits to associates in the ordinary course and offer essential customer programs. The company anticipates paying vendors in the ordinary course for authorized goods received and services rendered after the filing._x000D_
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The company is targeting completion of the sale process by year end. True Value stores are independently owned and are not a part of the chapter 11 proceedings, with the exception of one company-owned store in Palatine, IL.