True Value will no longer operate as a cooperative after its member retailers backed a plan to sell a majority stake to a Washington, D.C.-based private equity firm.
About 83 percent of the Chicago-based hardware company’s member retailers voted in favor of the deal.
In an agreement announced last month, Acon Investments will have a 70 percent stake in a new True Value operating company, with the remaining 30 percent owned by member retailers who currently own the cooperative. A portion of Acon’s investment would be used to return 70 percent of retailers’ invested capital, along with promissory notes and dividends, totaling about $229 million, to those retailers.
John Hartmann, president and CEO of True Value, said the investment and new structure will give current retailers money to invest in their businesses and help the brand expand its reach.
“We’re making it easier for all independent hardware retailers that want to be affiliated with a globally recognized brand that doesn’t have a membership or ownership requirement,” he said.
The new operating company will be led by the existing management team. Day-to-day operations for current retailers will not change, and they will continue to have access to the True Value brand and services including merchandising and marketing support, Hartmann said. True Value expects to distribute most of the funds to member retailers in the next two to three weeks.
The shareholder vote on the deal was pushed back after True Value provided additional information in response to a lawsuit from a shareholder seeking to halt the deal, which the court rejected, Hartmann said.
More Top Picks How Much Screen Time Is Too Much For A Childs Eyes
Twitter @laurenzumbach
IN CASE YOU MISSED IT
Carson’s closures may mean deals for shoppers, more challenges for hard-hit malls “
New law could make it harder to tell how much your airline tickets cost “