SAN JOSE, Calif.--(BUSINESS WIRE)--Orchard Supply Hardware Stores (OTCPINK:OSHWQ and OTCPINK:OSHQE), a neighborhood hardware and garden store focused on paint, repair and the backyard, today announced that the United States Bankruptcy Court for the District of Delaware has approved the acquisition of a majority of Orchard’s assets by Lowe’s Companies, Inc. The companies now expect to complete the transaction by the end of August. Orchard will operate as a separate, standalone business with its own brand and a continued commitment to its neighborhood store format, which uniquely caters to the needs of local consumers.
“The Court’s approval underscores the belief of Orchard’s Board and management team that the acquisition agreement with Lowe’s is in the best interest of Orchard stakeholders and puts the Company in a terrific position to continue the repositioning and growth strategy we have developed over the past two years,” said Mark Baker, Orchard President and Chief Executive Officer. “With Lowe’s support, the team will be better positioned to improve Orchard’s infrastructure, further enhance the Company’s merchandising strategy and grow the business with new neighborhood format stores and remodels. The management team and I are confident that Orchard has a very bright future ahead.”
At the close of the transaction, Lowe’s will acquire the majority of Orchard’s assets for approximately $205 million in cash, plus the assumption of payables owed to nearly all of Orchard's supplier partners. Orchard and Lowe’s first announced the agreement on June 17, 2013.
Orchard today announced that Mr. Baker has accepted a position as President and Chief Executive Officer of the Aircraft Owners and Pilots Association and, accordingly, will step down as Orchard’s President and Chief Executive Officer and as a member of the Company’s Board of Directors following the transaction. Mr. Baker will be available to advise Orchard as a consultant for several months.
With Mr. Baker’s departure following the transaction, Richard D. Maltsbarger, Lowe’s Business Development Executive who led the acquisition team, will become President of Orchard. Mr. Maltsbarger has served in various roles at Lowe’s since 2004 and brings more than 15 years of experience in strategic planning, consumer and market research, quantitative analytics, marketing and economic analysis to Orchard. He will be working closely with Orchard’s existing leadership team to lead Orchard’s repositioning and growth strategy.
As part of the transition, Chris D. Newman, currently Chief Financial Officer, will also serve as Head of Development, and Steven L. Mahurin, currently Executive Vice President Merchandising, will be appointed Chief Retail Officer.
In addition to maintaining his current area of responsibility, Mr. Newman will now lead development of the necessary infrastructure to support Orchard’s growth strategy, including information technology, supply chain and real estate. Mr. Newman joined Orchard in November 2011. He previously served as Chief Financial Officer and Secretary of Restoration Hardware, Inc. and as Chief Financial Officer of Store Operations for Limited Brands. Mr. Mahurin will focus on Orchard’s external brand projection, including merchandising, and take on the additional responsibilities of marketing and store operations. Mr. Mahurin joined Orchard in May 2011. He previously served as Executive Vice President of Merchandising for Office Depot, Inc. and as Chief Merchandising Officer for True Value Company.
Orchard's customers and suppliers can access additional information about the Company's Chapter 11 filing on its dedicated website, www.OrchardRestructuring.com. Orchard also has established a supplier support center, which may be reached at 855-529-6819 or email@example.com.
Orchard is advised in this financial restructuring by Moelis & Company, FTI Consulting and DLA Piper.
About Orchard Supply Hardware
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. Today the stores average approximately 36,000 square feet of interior selling space and 8,000 square feet of exterior nursery and garden space. As of June 16, 2013 the Company had 89 stores in California and two stores in Oregon. 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. Orchard expects to continue operating its remaining 72 stores at the completion of the sale process. For more information, visit http://osh.com.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:
This press release (including information incorporated or deemed incorporated by reference herein) contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are those involving future events and future results that are based on current expectations, estimates, forecasts, and projections as well as the current beliefs and assumptions of the Company's management. Words such as "guidance", "outlook", "believes", "expects", "appears", "may", "will", "should", "intend", "target", "projects", "estimates", "plans", "forecast", "is likely to", "anticipates", or the negative thereof or comparable terminology, are intended to identify such forward looking statements. Any statement that is not a historical fact and other estimates, projections, future trends and the outcome of events that have not yet occurred referenced in this press release, is a forward-looking statement. Forward-looking statements are only predictions and are subject to risks, uncertainties and assumptions that are difficult to predict. Therefore actual results may differ materially and adversely from those expressed in any forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, factors discussed under the section entitled "Risk Factors" in the Company's reports filed with the Securities and Exchange Commission, the ability to conclude the transaction with Lowe's and the challenges and risks associated with operating the business under Chapter 11 protection. Many of such factors relate to events and circumstances that are beyond the Company's control. You should not place undue reliance on forward-looking statements. The Company does not assume any obligation to update the information contained in this press release.