HD Supply White Cap has agreed to purchase substantially all of the assets of ORCO Construction Supply, the Livermore, Calif., firm that last month had said it planned to sell itself to a firm run by White Cap's founder.
A spokesperson for HD Supply White Cap told ProSales today that White Cap outbid its competition when ORCO's fate came up for consideration in federal bankruptcy court. On April 7, ORCO announced would sell its assets to ACSP, an entity controlled by Greg Grosch, cofounder of White Cap Construction Supply. At the same time, filed for protection from creditors under chapter 11 of the federal bankruptcy laws, seeking a sale under the bankruptcy code's Section 363, which allows for the sale of assets free of liens and other claims. It was during that sale process that White Cap came out the winner.
"The acquisition of ORCO's assets provides HD Supply White Cap with an increased ability to provide world-class service to our existing and prospective customers," HD Supply White Cap president Tom Lazzaro said in a statement. "It further strengthens our leading position in an important region with strong growth potential."
Livermore, Calif.-based ORCO distributes specialty hardware, tools and materials for large and medium-sized contractors. It ranked 21st on the 2008 ProSales 100ydusvvzf, with sales in 2007 of $271.2 million, 87% of them to pros, but didn't take part in the 2009 ProSales 100 survey.
In its April announcement, ORCO said it has 12 locations and two rebar facilities in California, Nevada, and Arizona, but White Cap's announcement, issued May 19, talked about 11 distribution locations and two rebar facilities. Officials from White Cap and ORCO weren't immediately available to explain the differing counts.
Like many other dealers, ORCO has been hard-hit by the housing downturn. In February, it announced it would consoldiate seven branches. At that time, Alexander called those closures "simply the latest in a series of planned and well-executed steps to remain viable in such a depressed market."
ORCO will begin operating under the HD Supply White Cap brand following the closing of the transaction, White Cap said.