Handy Hardware Wholesale said it welcomed the bankruptcy court approval of its debtor in possession (DIP) financing loan modification that brings funding from Littlejohn Management Holdings.
Littlejohn, which agreed to acquire Handy and shed its co-op structure as it emerges from bankruptcy, will provide a $4 million DIP loan, funding that will commence this week.
In a note to members, the Handy board wrote: “the financial support from Littlejohn, demonstrated through this loan participation in Handy’s revolving working capital facility, will help Handy raise its service levels for its Member Dealers from the current level of approximately 90% up to the mid 90s – a level to which Member Dealers are accustomed.”
Littlejohn Management Holdings is a Connecticut-based private equity firm with holdings in the wholesale distribution business and the hardware industry.
Under the plan, Handy will emerge from bankruptcy as a subsidiary of a Littlejohn portfolio company and maintain its Handy Hardware identity in the marketplace.
Handy says it expects the court to approve the plan in July.
The note to members pointed out that the Littlejohn acquisition has the approval of the Handy Board of Directors, Member Advisory Committee and Member Equity Committee. It added: “Littlejohn’s objective is to have Handy operate as an independent distributor of hardware related products consistent with Handy’s past though Handy will no longer be a member-owned Co-op.”