header image

[Sign Up Now] to Receive Our FREE Daily SCVTV-SCVNews Digest by E-Mail

Inside
Weather
Santa Clarita CA
Sunny
Sunny
46°F
 
Calendar
Today in
S.C.V. History
October 26
1970 - Permanent COC Valencia campus dedicated [story]
COC dedication ceremony program


osh_logo[OSH] – Orchard Supply Hardware Stores (OSH), a neighborhood hardware and garden store focused on paint, repair and the backyard, today announced that it has reached an agreement through which Lowe’s Companies, Inc. (LOW) will acquire the majority of its assets for $205 million in cash, plus the assumption of payables owed to nearly all of Orchard’s supplier partners. To facilitate the sale and restructure its balance sheet, Orchard has filed voluntary Chapter 11 petitions in the United States Bankruptcy Court for the District of Delaware.

The agreement with Lowe’s comprises the initial stalking horse bid in the Court-supervised auction process under Section 363 of the Bankruptcy Code. Under the terms of the agreement, Lowe’s would acquire no less than 60 of Orchard’s stores, based on further due diligence on the store locations. The Company expects to complete the process in approximately 90 days, pending receipt of the necessary approvals from regulators and the Bankruptcy Court.

Orchard fully expects to operate its overall business and the vast majority of its stores as usual during its financial restructuring. To this end, the Company has secured commitments for $177 million in debtor-in-possession (“DIP”) financing from Wells Fargo Bank, the Company’s existing ABL lender, and its Term Loan Lenders which, in addition to Orchard’s ongoing cash flow, will ensure it is able to continue meeting its financial obligations throughout the Chapter 11 case. In addition, the Term Loan Lenders have formally agreed to support the acquisition agreement with Lowe’s as the stalking horse. Orchard also has filed a series of first day motions seeking authority to pay employee wages and benefits, honor customer gift cards and Club Orchard incentives, and otherwise manage its day-to-day operations as usual.

Orchard expects to pay suppliers in the normal course for all goods and services delivered on or after June 17, 2013. Payment for goods and services delivered prior to the filing will be addressed through the Chapter 11 process. It is currently expected that the vast majority of these claims will be assumed by Lowe’s as part of the sale agreement.

Orchard, which generated revenue of $657 million in fiscal 2012, 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.

“Orchard has consistently delivered an exceptional shopping experience for our customers and, as we have executed our repositioning strategy, has also made significant operational improvements to ensure that our stores are optimally positioned for long-term success,” said Mark Baker, Orchard President and Chief Executive Officer. “The steps we are taking today allow us to definitively address our balance sheet issues in order to fully execute on our brand transformation and growth strategies. We believe that Lowe’s offer is a validation of Orchard’s unique market opportunity and of our strategy to capture it. We are confident the steps we are taking today will allow us to achieve our financial and operational goals and are certain we are making the right decision both for our business and for the many individuals and families who depend on Orchard.”

Orchard previously has dedicated considerable effort to addressing the substantial overleveraging that originated in 2006, when it was still owned by Sears. Since the spin-out in late-2011, the Company has reduced its debt and has made significant progress against its strategic initiatives to project a consistent and compelling brand identity, drive sales through merchandising and marketing initiatives, improve operational efficiency, and better align resources and talent, and has increased year-over-year same-store sales as a result. Still, the Company anticipated it would not be able to make scheduled payments when the first tranche of its debt matures in December of 2013 and accordingly reviewed a range of alternatives to establish a sustainable capital structure, which would allow it to more effectively run its business and execute on its repositioning and growth strategy. Management and the Board of Directors determined that a sale of Orchard through a Chapter 11 process was the best possible outcome for the Company and its stakeholders.

“Orchard’s neighborhood stores are a natural complement to Lowe’s strengths in big-box retail, offering smaller-format hardware and garden stores catering to the needs of local customers,” said Mr. Robert A. Niblock, Chairman, President and CEO of Lowe’s. “Strategically, the acquisition will provide us with immediate access to Orchard’s high density, prime locations in attractive markets in California, where Lowe’s is currently underpenetrated, and will enable us to participate in a larger way in California’s economic recovery.

“Overall, Orchard’s business model offers great potential, but it has been burdened with a high level of debt,” Mr. Niblock continued. “With the debt addressed through the Chapter 11 process and appropriate support from Lowe’s, we believe that Orchard will be positioned for profitable growth as a standalone business within our portfolio.”

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 suppliers@osh.com.

Orchard is advised in this transaction by Moelis & Company, FTI Consulting, and DLA Piper.

 

About Orchard

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 has 89 stores in California and two stores in Oregon. For more information, visit http://osh.com.

Comment On This Story
COMMENT POLICY: We welcome comments from individuals and businesses. All comments are moderated. Comments are subject to rejection if they are vulgar, combative, or in poor taste.
REAL NAMES ONLY: All posters must use their real individual or business name. This applies equally to Twitter account holders who use a nickname.

0 Comments

You can be the first one to leave a comment.

Leave a Comment


Latest Additions to SCVNews.com
1970 - Permanent COC Valencia campus dedicated [story]
COC dedication ceremony program
No. 3 College of the Canyons overcame a slow start to eventually find its rhythm and flex its muscle in a 34-14 conference win over No. 15 Allan Hancock College on Saturday at Cougar Stadium.
No. 3 Canyons Remains Undefeated with 34-14 Victory Over No. 15 Allan Hancock
Saugus handily won Friday night’s matchup of the Foothill League’s two best teams thanks to its suffocating defense, beating West Ranch 42-8 at College of the Canyons.
Cents Clinch Share of Foothill League Title After Decisive Win Over Wildcats
Artists Day returns to Rancho Camulos Museum on Friday, Nov. 12, from 9:00 a.m. - 4:00 p.m.
Nov. 12: Rancho Camulos Museum Fall Artists Days
Keith Mowry, owner of Bob’s Country Meats in Canyon Country, died Friday night due to complications from surgery and infection doctors were unable to remove.
Bob’s Country Meats Owner Dies from Health Complications
Officials from Henry Mayo Newhall Hospital on Monday announced an additional death, bringing the total number of COVID-19 deaths since the onset of the pandemic to 177, spokesman Patrick Moody confirmed.
Monday COVID-19 Roundup: 177th Death at Henry Mayo
Because of the recent rainfall, Los Angeles County Health Officer, Muntu Davis, MD, MPH, is cautioning residents that bacteria, chemicals, debris, trash, and other public health hazards from city streets and mountain areas are likely to contaminate ocean waters at and around discharging storm drains, creeks, and rivers after a rainfall.
L.A. County Issues Beach Water Advisory
The city of Santa Clarita’s Film Office released the seven productions currently filming in the Santa Clarita Valley for the week of Monday, Oct. 25 - Sunday, Oct. 31, 2021:
Filming This Week in SCV Includes One Feature & Six TV Shows, Including ‘This Is Us’
The National Weather Service is forecasting a large storm system in Los Angeles County beginning early Monday. County officials have issued a No Phase Flow Forecast for all communities in the region.
L.A. County Residents Urged to Prepare for Flood Risk
1898 - Newhall pioneer Henry Clay Wiley (Wiley Canyon) dies in Los Angeles [story]
HC Wiley obituary
1992 - Dedication of Santa Clarita's first Metrolink station (Santa Clarita Station) [brochure]
Santa Clarita Metrolink grand opening brochure
1888 - 8:15 a.m.: Newhall's luxurious Southern Hotel burns to the ground [story]
Southern Hotel
On Saturday, Oct. 23, SCV Sheriff Station J-Team deputies will be hosting a "Drug Take Back Day" between 10 a.m. and 2 p.m. in front of the Santa Clarita Valley Sheriff's Station.
Oct. 23: SCV Sheriff’s Station Hosting “Drug Take Back Day”
Los Angeles County Public Health officials on Friday confirmed 15 new deaths and 1,227 new cases of COVID-19 countywide, with 36,989 total cases in the Santa Clarita Valley.
Friday COVID-19 Roundup: County Begins Administering COVID Vaccine Boosters for All Three FDA-Approved Vaccines to Residents; SCV Cases Total 36,989
As you walk along the River Village Park Trail at Duane R. Harte Park, you can now enjoy nature and a story at the same time.
Santa Clarita Public Library Debuts ‘Trail Tales’ Literary Adventure at Duane R. Harte Park
The total number of anti-Asian hate crimes within Los Angeles County rose 76% in 2020, according to a report released Wednesday.
L.A. County Anti-Asian Hate Crimes See 76% Increase in 2020
Residents in unincorporated Los Angeles County were told Thursday to ignore a recent notice concerning home registry from the Department of Consumer and Business Affairs, according to officials in Supervisor Kathryn Barger’s office.
County ‘Rental Property’ Notice Sparks Homeowner Confusion
Classified employees within the Saugus Unified School District are now showing their COVID-19 vaccination verification or undergoing weekly testing to work in the office.
Classified School Workers Undergo COVID-19 Vaccine Verification
Californians age 70 and older may continue to renew their driver’s licenses online or by mail through Dec. 31, 2022. Gov. Gavin Newsom recently signed legislation to extend this temporary rule.
Californians 70 and Older Can Renew Driver’s Licenses Online Through 2022
Six Flags Magic Mountain, the undisputed “Thrill Capital of the World,” in partnership with Warner Bros. Themed Entertainment and DC, today unveiled plans to add yet another record-breaking coaster—WONDER WOMAN™ Flight of Courage—to its unparalleled thrill ride lineup.
Six Flags Magic Mountain Announces Record 20th Coaster WONDER WOMAN Flight of Courage
Smells of Filipino food wafted outside the Newhall Community Center as a welcome for attendees of the Fil-Am Association of Santa Clarita Valley, “Pistahan at Bayanihan” (Festivities and Community) Cultural Festival.
Community Leaders Celebrate Filipino Culture, History
Cincinnati Reds pitcher Hunter Greene is returning to his former home of Stevenson Ranch Saturday to meet local kids and give out free baseball cleats.
SCV Native, Cincinnati Reds Pitcher Hunter Greene Offering Free Cleats for Local Kids
1898 - Birth of Mary S. Ruiz, eldest child of Enrique & Rosaria Ruiz of San Francisquito Canyon; all died in 1928 dam disaster [cemetery census]
grave markers
Senate Republican Leader Scott Wilk, (R-Santa Clarita), delivered a second letter Thursday to ensure accountability on a state-funded COVID-19 testing lab.
Wilk Demands Newsom Admin to Halt Auto-Renew Of No-Bid Contract for Valencia Testing Lab
SCVNews.com
%d bloggers like this: