In a liquidation move that spells the end for Vernon Hills, Ill.–based Wickes Lumber, the pro dealer recently agreed to sell off all of its remaining 59 locations to Redmond, Wash.–based Lanoga Corp.; Broken Arrow, Okla.–based Hope Lumber and Supply; and Avenel, N.J.–based Bradco Supply Corp. Wickes, which reached a high point of 115 locations in 2002, originally filed for Chapter 11 bankruptcy protection on January 20, and although the company secured a debtor-in-possession credit line of $115 million in March, it was still unable to reorganize operations sufficiently enough to exit Chapter 11 as originally planned.
According to documents filed June 28 with the U.S. Bankruptcy Court for the Northern District of Illinois Eastern Division, Lanoga will swallow the most locations, adding 26 units in Illinois, Indiana, Kentucky, Ohio, and Michigan to its Winona, Minn.–based United Building Centers (UBC) division. An additional location in Colorado Springs, Colo., will be added to Lanoga's Denver-based Home Lumber division. Bradco will take over 20 Wickes locations in the Northeast and Midwest under the terms of the agreement, and Hope adds eight units in the South and four units in Colorado.
According to Lanoga president and CEO Paul Hylbert, the pending acquisition brings UBC deep ranks of sales and managerial personnel talent. “People are key, and both the management and the sales force are extremely important [to the deal],” Hylbert says. “Wickes has a strong group of managers that have been through a tough time the last six months, and we are looking forward to having them on the team.”
Bradco, as well, is anticipating the product and sales experience of incoming Wickes personnel. “We were surprised to find out that many of the people at Wickes have been there for 15 to 20 years or longer,” says Bradco president Brad Segal. “They appear to have a lot of very good people, and we feel we will be able to share best practices and learn from each other.”
Lanoga is not a first-timer to bulk acquisition deals with Wickes. In October 2002, the pro dealer purchased 14 Wickes lumberyards and three component plants in Wisconsin and 17 lumberyards and one component plant in Michigan. Those facilities, which generated combined sales of approximately $300 million, also were folded into UBC. For Bradco, the acquisition will bring the company into several new markets and also introduce lumber as a primary product line for the specialty distributor. “While our customer base is similar, they sell to a lot of builders and contractors that we are not selling roofing, siding, and windows to and vice versa,” Segal says. “We will now be able to offer many more products and services to our customers, which should help to make us a more valuable supplier to them.” Bradco plans to continue to operate some of the acquired locations under the Wickes name.
Representatives from Hope Lumber confirmed the terms of the deal but were otherwise unavailable for comment.
Terms of the deals are still subject to an auction process under competitive bidding rules of U.S. Bankruptcy Court. Players in the deals, however, expressed conservative optimism and did not expect significant changes to occur in the structure of the deals at the conclusion of the auction process. “It is always difficult to predict and we are monitoring it on a continuing basis,” Hylbert says. “But we think that most of the bidding is done.”
Wickes' remaining company assets remain for sale to interested bidders.