Orchard Supply Hardware Stores, a neighborhood hardware and garden store focused on paint, repair and the backyard, announced that, after completing a Court-approved marketing process, it intends to proceed toward completing the previously announced acquisition agreement with Lowe’s Companies, Inc., pending approval by the United States Bankruptcy Court for the District of Delaware.
Lowe’s was named on June 17, 2013, as the stalking horse bidder in Orchard’s Court-supervised auction process under Section 363 of the Bankruptcy Code. In order to be considered under the bidding procedures approved by the Bankruptcy Court, any competing bidders would have needed to submit qualifying bids before 4 p.m. Eastern Time on Friday, August 9, 2013. Orchard engaged in discussions with a number of potential buyers but did not receive any qualifying bids in advance of this deadline. Accordingly, the auction previously scheduled for August 14, 2013 will not be held. Orchard will now move forward to have the sale to Lowe’s approved by the Bankruptcy Court on August 20, 2013, and completed by the end of August.
As announced on June 17, 2013, Lowe’s will acquire the majority of Orchard’s assets for $205 million in cash, plus the assumption of payables owed to nearly all of Orchard's supplier partners. Under the terms of the agreement, Orchard will operate as a separate, standalone business at the completion of the sale process, retaining its brand, management team and associates. The company also will benefit from the financial stability of its new corporate parent, which, combined, with the benefits of its balance sheet restructuring, will allow Orchard to continue its repositioning and growth strategy.
As part of its ongoing Chapter 11 process, Orchard today identified nine additional stores that will begin store closing sales on August 15, 2013. In addition to the 17 stores that are being closed as part of the Chapter 11 process, two stores have closed in the normal course of business since June 17, 2013. The Company expects to continue operating its remaining 72 stores at the completion of the sale process.
Orchard is advised in this financial restructuring by Moelis & Company, FTI Consulting and DLA Piper.
To view the announcement from Lowe's Companies regarding this matter, click here.
Orchard Supply Hardware Stores Corporation operates neighborhood hardware and garden stores focused on paint, repair and the backyard. The company was founded as a purchasing cooperative in San Jose in 1931.