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Costco Buys Innovel Solutions From Transform Holdco For $1 Bln - Quick Facts

Transform Holdco or TFCO announced Tuesday that Costco Wholesale Corp. (COST) has acquired Innovel Solutions, its middle mile and final mile delivery and installation business, for $1 billion.

The deal provides for a long-term commercial arrangement whereby Costco provides TFCO warehousing, delivery and installation services to Sears and Kmart members and Costco will retain over 1,500 Innovel employees on a go-forward basis.

Additionally, Costco will enter into a long-term commercial agreement whereby Costco will leverage TFCO's Service Live platform to source technicians for complex installations across the country.

This transaction will provide Innovel and its employees with the resources to continue to build out a best in class logistics platform and the proceeds from the sale will allow TFCO to repay all of its non-real estate debt.

It also positions TFCO to pursue other transformative actions to fully leverage its core assets and capabilities to realize maximum value for all stakeholders. The company is looking to now primarily focus on its Real Estate, Home Services, Brands and Shop Your Way membership program. It also intends to continue to evolve its small store format as a complement to the other core businesses.

TFCO plans to further streamline retail operations over the next several months and focus on those stores with a strong record of success or meaningful real estate value.

TFCO will continue to work with its financial and legal advisors to adjust its capital structure and to pursue partnerships and transactions with third parties to maximize the value of its assets.

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