ACO HARDWARE CHAIN ANNOUNCES INTENT TO ACQUIRE NHD, NEW ENGLAND-BASED HARDWARE CHAIN
Under the agreement ACO, through its subsidiary, ACO Hardware East, Inc., will commence a tender offer for all outstanding common stock of NHD at $1.75 per share in cash. The tender offer will be followed by a merger in which shares not acquired by ACO in the tender offer will be acquired for the same price per share.
It is currently anticipated that the tender offer, which has been unanimously approved by the boards of directors of NHD and ACO, will commence on March 31, 1995 and will be conditioned on, among other things, 90 percent of the outstanding shares of NHD being tendered.
ACO Inc. operates 65 hardware stores in Michigan and employs nearly 1,100 people. Company sales in 1994 (Fiscal Year Ended Feb. 28, 1995) were $96 million. NHD Stores, Inc. operates 33 stores throughout Massachusetts, Connecticut, Rhode Island and New Hampshire and has 489 employees. The company had $48.6 million in sales in 1994 (Fiscal Year Ended Jan. 28, 1995).
"Both ACO Inc. and NHD Stores, Inc. have been innovators in the retail hardware market," said ACO Chairman William Aiken. "Our goal is to utilize our 25 years of experience in warehouse management, inventory enhancements, scanners and in implementing upgrades to customer-service technology -- and merge them with both companies' commitment to local neighborhood hardware retailing."
ACO Inc. was founded in 1946 as a 2,000 square-foot neighborhood hardware store in Dearborn, Mich., with a $5,000 investment by Ted and Joe Traskos. Ted Traskos continues to serve as chairman of the company's Executive Committee.
"This acquisition enables both hardware chains to strengthen their positions as the convenient alternative for consumers compared to warehouse home centers," said Traskos. "Despite the increase in the number of home centers across the country, our company has shown consistent growth over the past few years. We are concentrating on providing the greatest value to consumers through highly qualified and well-trained employees. We are firmly committed to our aggressive advertising campaign -- which has a successful track record over the past four decades."
NHD Stores, Inc. was established in 1960 by Sheldon M. Woolf and Martin E. Feldman in Massachusetts. After a period of rapid growth, the company's initial public offering occurred in 1969. NHD became the nation's largest hardware leased-department operator, with over 82 units in 21 states as far west as Salt Lake City. NHD transitioned out of the leased-department business and beginning in 1975, NHD opened its first of many hardware stores, operating under the trademark "NHD Super Hardware Stores."
"This merger will make two well-established and strongly positioned hardware chains stronger and more dynamic," said Sheldon Woolf, president of NHD Stores, Inc., who will continue to direct the day-to- day operations of the New England-based company. "Each of our companies has focused its operations on the neighborhood convenience hardware markets and otherwise share similar marketing philosophies. The current market is very competitive, but we see this as an opportunity to improve our efficiency, coordinate vendor relationships and to enhance product selection and value to our customers."
Commenting on NHD's losses in the past few years, Woolf noted that, in addition to a depressed New England economy and increasing competitive pressures, a number of unproductive stores in the chain have also been a drain on the corporation. "Although liquidity has been maintained and NHD's lenders have continued their support, there can be no assurance of this continuing in light of these competitive pressures," said Woolf, "Under the circumstances, and the lack of market interest in NHD Common Stock as indicated by a low level of activity, NHD has been exploring ways of enhancing shareholder value. This acquisition by ACO at a price substantially in excess of the stock market value and above book value of NHD, is the most advantageous opportunity for the company." Woolf noted that he was NHD's largest stockholder.
ACO Inc. has been an industry leader in state-of-the-art computer systems. In the retail hardware field, the company pioneered the use of UPC scanning for inventory control and customer service in 1986. In 1992, ACO implemented automatic replacement systems. These systems will be implemented at NHD Stores, Inc. when the acquisition is complete.
"ACO Inc. intends to continue with current management structures for both companies," said Aiken.
/CONTACT: Paul Hall or Chuck Overy of Casey Communications Management, 810-746-6070.
CO: Aco Inc.; NHD Stores, Inc. ST: Michigan, Massachusetts IN: REA SU: TNM
KA-SC -- DE032 -- 2075 03/29/95 17:00 EST
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|Date:||Mar 29, 1995|
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