Do it Best wants to grow True Value brand, CEO says
Subscriber Benefit
As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe Now
The CEO of Fort Wayne-based Do it Best Corp. says he plans to keep the True Value Co. brand intact if a bid to acquire the company’s assets is successful.
The Chicago-based hardware wholesaler on Monday filed for Chapter 11 bankruptcy protection and said it had entered into an agreement to sell to Do it Best through a stalking horse bid process.
“[True Value] reached out to a number of folks who might have interest in acquiring their assets, and we certainly have interest,” Do it Best CEO Dan Starr said. “So we responded to it, and through a series of negotiations, got to the point where we are today.”
Starr told Inside INdiana Business that the deal would bring a number of benefits to Do it Best.
“They have distribution centers across the United States, and they serve about little over 4,000 independent dealers,” he said. “What that brings to us is greater scale, greater potential for efficiency, productivity improvements. And in distribution, that is really the bread and butter of how you can get greater efficiency to deliver more value to the folks that you serve.”
True Value serves 4,500 independently owned hardware retailers and has stores in more than two dozen Indiana communities.
The company’s bankruptcy filing kicks off a public bidding process with Do it Best as the lead bidder. Do It Best will make an initial cash offer of $153 million and the assumption of up to $45 million in additional liabilities.
The process does allow for another potential buyer to outbid Do it Best, Starr said. If that does not happen, he said the cooperative must also clear federal regulatory hurdles to complete the acquisition.
Starr noted that while Do it Best does have long-term plans to integrate True Value into its system, he wants to take that process slow.
“When you have a transaction size of this complexity, the main thing that we want to do as of a closing would be to bring stability of operations and make sure that the customers who rely on True Value go through no disruption to their normal business,” he said. “You do want to work on plans for integration, but you don’t want to do that at such a speed that you begin to threaten the very thing that you have acquired.”
He also said that Do it Best has no plans to do away with the True Value name, as the more than 75-year-old brand was a key consideration in the decision to go forward with the acquisition.
“We really think that retail brand has continued strength, and what we’d like to do is support it, strengthen it, grow it beyond its current usage. So no, our plan would not be to migrate folks out of that brand but instead to strengthen the brand.”
The company said it expects to complete the sale process by the end of the year.
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.