--No Additional Bids for Orchard Assets Received by Court Deadline--
MOORESVILLE, N.C.--(BUSINESS WIRE)--Aug. 12, 2013--
Lowe’s Companies, Inc. (NYSE: LOW), the world’s second largest home
improvement retailer, today announced further progress in its plans to
acquire the majority of assets of Orchard Supply Hardware, including 72
stores, for approximately $205 million in cash, plus the assumption of
payables owed to nearly all of Orchard’s supplier partners, subject to
Bankruptcy Court approval. Lowe’s has been advised by Orchard that no
additional bids were received by the deadline of August 9, 2013. The
transaction will be presented to the Bankruptcy Court for approval on
August 20, 2013, and Lowe’s anticipates completing the acquisition by
the end of August.
Lowe’s plans to have Orchard operate as a separate, standalone business,
retaining its brand under the leadership of Orchard’s current management
team. Lowe’s plans to acquire the locations most complementary to its
current strategy and store footprint.
Once completed, the acquisition will enable Lowe’s to expand its
presence in California and reach a new customer base through the
addition of Orchard’s smaller-format stores in densely populated areas.
Orchard’s neighborhood hardware and garden stores offer a product
selection focused on paint, repair and backyard categories in
approximately 36,000 square feet of selling space, compared to 113,000
square feet of selling space for an average Lowe’s home improvement
store. Lowe’s currently operates 110 stores in California.
Robert A. Niblock, Chairman, President and CEO of Lowe’s, said, “We are
very pleased to be moving forward with the acquisition process.
Strategically, the transaction will provide Lowe’s with an attractive
opportunity to increase our store footprint in California, where we are
currently underpenetrated, through a neighborhood store format that is
complementary to our strengths in big-box retail. Orchard’s hardware and
garden stores have a loyal customer base and are situated in
high-density, prime locations that are difficult for larger format
retailers to enter. We see significant potential for Orchard as a
standalone business within Lowe’s portfolio, and we look forward to the
opportunity to participate more fully in California’s economic recovery.”
As announced on June 17, 2013, Lowe’s entered into a purchase agreement
with Orchard that would serve as the “stalking-horse bid” in a
Bankruptcy Court-supervised auction under Section 363 of the U.S.
Bankruptcy Code. Interested bidders were required to file initial bids
with the Court by August 9, 2013. Orchard initiated Chapter 11
proceedings on June 17, 2013 in the U.S. Bankruptcy Court for the
District of Delaware. Based in San Jose, California, Orchard reported
annual revenue of $657 million for fiscal 2012.
Goldman Sachs is acting as financial advisor to Lowe’s, while Hunton &
Williams LLP is acting as legal advisor.
With fiscal year 2012 sales of $50.5 billion, Lowe’s Companies, Inc. is
a FORTUNE® 100 company that serves approximately 15 million customers a
week at more than 1,750 home improvement stores in the United
States, Canada and Mexico. Founded in 1946 and based in Mooresville,
N.C., Lowe’s is the second-largest home improvement retailer in the
world. For more information, visit Lowes.com.
Disclosure Regarding Forward-Looking Statements
This news release includes “forward-looking statements” within the
meaning of the Private Securities Litigation Reform Act of 1995 (the
“Act”). Statements of the Company’s expectations for sales growth,
comparable sales, earnings and performance, shareholder value, capital
expenditures, cash flows, the housing market, the home improvement
industry, demand for services, share repurchases, the Company’s
strategic initiatives and any statement of an assumption underlying any
of the foregoing, constitute “forward-looking statements” under the Act.
Although we believe that the expectations, opinions, projections, and
comments reflected in these forward-looking statements are reasonable,
we can give no assurance that such statements will prove to be correct.
A wide variety of potential risks, uncertainties, and other factors
could materially affect our ability to achieve the results either
expressed or implied by our forward-looking statements including, but
not limited to, changes in general economic conditions, such as
continued high rates of unemployment, interest rate and currency
fluctuations, higher fuel and other energy costs, slower growth in
personal income, changes in consumer spending, changes in the rate of
housing turnover, the availability and increasing regulation of consumer
credit and of mortgage financing, inflation or deflation of commodity
prices, and other factors which can negatively affect our customers, as
well as our ability to: (i) respond to adverse trends in the housing
industry, such as the psychological effects of lower home prices, and in
the level of repairs, remodeling, and additions to existing homes, as
well as a general reduction in commercial building activity; (ii)
secure, develop, and otherwise implement new technologies and processes
designed to enhance our efficiency and competitiveness; (iii) attract,
train, and retain highly-qualified associates; (iv) manage our business
effectively as we adapt our traditional operating model to meet the
changing expectations of our customers; (v) to maintain, improve,
upgrade and protect our critical information systems; (vi) respond to
fluctuations in the prices and availability of services, supplies, and
products; (vii) respond to the growth and impact of competition; (viii)
address changes in existing or new laws or regulations that affect
consumer credit, employment/labor, trade, product safety,
transportation/logistics, energy costs, health care, tax or
environmental issues; and (ix) respond to unanticipated weather
conditions that could adversely affect sales. In addition, we could
experience additional impairment losses if the actual results of our
operating stores are not consistent with the assumptions and judgments
we have made in estimating future cash flows and determining asset fair
values. Additionally, the following factors, among others, could cause
actual results, financial results and timing of certain events to differ
materially from those described in forward-looking statements: failure
of the proposed transaction to be implemented; the challenges and costs
of closing and integrating operations; the ability to retain key
employees of the target company; and risks inherent in seeking
regulatory and judicial approval of the transaction. For more
information about these and other risks and uncertainties that we are
exposed to, you should read the “Risk Factors” and “Critical Accounting
Policies and Estimates” included in our Annual Report on Form 10-K to
the United States Securities and Exchange Commission (the “SEC”) and the
description of material changes therein or updated version thereof, if
any, included in our Quarterly Reports on Form 10-Q.
The forward-looking statements contained in this news release are based
upon data available as of the date of this release or other specified
date and speak only as of such date. All subsequent written and oral
forward-looking statements attributable to us or any person acting on
our behalf about any of the matters covered in this release are
qualified by these cautionary statements and the “Risk Factors” included
in our Annual Report on Form 10-K to the SEC and the description of
material changes, if any, therein included in our Quarterly Reports on
Form 10-Q. We expressly disclaim any obligation to update or revise any
forward-looking statement, whether as a result of new information,
change in circumstances, future events, or otherwise.
Source: Lowe’s Companies, Inc.
Lowe’s Companies, Inc.
Chris Ahearn, 704-758-2304