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, 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.
“We are thrilled to be moving toward completing the sale to Lowe’s and we believe this agreement is the best outcome for our associates, customers, suppliers, creditors and other business partners,” said Mark Baker, Orchard President and Chief Executive Officer. “Lowe’s submitted a bid at the start of the sale process which we believe reflects their understanding of our value proposition, our unique market opportunity and how our businesses complement one another. We look forward to continuing to execute on our repositioning and growth strategy with their ongoing support and believe this acquisition will lead to a very bright future for Orchard.”
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'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 firstname.lastname@example.org.
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. 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.