Sold: Handy Hardware to Littlejohn
Handy Hardware Wholesale, the Houston-based co-op that filed for bankruptcy protection in January, announced that Littlejohn Management Holdings has agreed to acquire Handy.
Littlejohn is a Connecticut-based private equity firm with substantial holdings in the wholesale distribution business and the hardware industry. The company's website includes Howard Berger Co. and Installed Building Products among its portfolio.
According to Handy, if the deal is approved by the court, then Handy would emerge from bankruptcy this summer as a subsidiary of a Littlejohn portfolio company, while maintining its Handy Hardware brand. Handy would no longer be a member-owned co-op.
In the note to members from the co-op's board of directors, a series of townhall meetings were said to be in the works for the coming weeks.
The note also said: "Current Handy member dealers will not have to contribute additional equity as part of the plan, and Littlejohn wil also eliminate the 2% warehouse service fee upon closing."
As part of the deal, Littlejohn will provide $4 million in cash funding to Handy as part of its Debtor in Possession secured financing to ensure that Handy has sufficient funds for inventory procurement and operations during the transition.
The deal, which has the support of Handy's board of directors, its member advisory committee and member equity committee, is expected to gain court approval in July 2013, Handy said.