Stock Building Supply Holdings LLC will buy the assets of Arkansas' National Home Centers, which is now under protection from creditors under Chapter 11 of federal bankruptcy laws, Stock announced today.
Stock said it had entered into an agreement with National under which Stock will be a "stalking horse" bidder for National's assets pursuant to Section 363 of Chapter 11. That section allows for the sale of assets free of liens and other claims.
Springdale, Ark.-based National--the No. 26 dealer on last year's ProSales 100, with $144.7 million in revenue in 2008--filed for bankruptcy on Dec. 9. CEO and company founder Dwain Newman told an Arkansas business journal that National Home Centers had to file because it was having trouble with its lender, CIT Group Inc., which itself was just emerging from Chapter 11.
On Feb. 2, a federal bankruptcy judge approved National's request to hire a consultant to help it stage "store closing sales" at its branches in Bentonville, Clarksville, and Little Rock, Ark. The dealer also sought today to have a lease canceled on property it was renting, and it has reported it recorded a $470,740 loss in December, its first month under Chapter 11. (Story)
"We are excited about the offer received from Stock," Newman said today. "It is a financially stable partner with a well-developed strategy and a demonstrated track record of improving its own operations despite tough market conditions."
Stock is quite familiar with the tough market. It spent much of 2009 in Chapter 11 as well, emerging last July 1 as a much smaller company focused on 19 markets. In January, Stock President Joe Appellmann said that Stock and its 51% owner, The Gores Group LLC, were looking to grow the company.