The rescue deal secures up to 1,600 jobs and 70 stores but leaves the future of its remaining 2,000 workers and 49 shops unclear.
The DIY retailer appointed administrators at consultancy Teneo on Wednesday before CDS, which owns The Range homeware outlets, bought the majority of its stores out of administration.
Teneo said the remaining 49 UK stores will continue to trade as normal while administrators try to find a buyer.
Homebase mostly rescued from administration
CDS, which is owned by retail magnate Chris Dawson, bought the 40-year-old Homebase brand.
Damian McGloughlin, chief executive of Homebase, said the last three years had been “incredibly challenging” for DIY stores, blaming “a decline in consumer confidence and spending” after the pandemic.
He added: “Against this backdrop, we have taken many and wide-ranging actions to improve trading performance including restructuring the business and seeking fresh investment.
“These efforts have not been successful and today we have made the difficult decision to appoint administrators.”
Homebase was bought for £1 by investment firm Hilco Capital in 2018 which introduced a swathe of cost-cutting measures in the subsequent years.
But the retail chain struggled as customers cut back on spending amid the cost-of-living crisis and reported an £84.2 million loss last year.
Sainsbury’s struck a deal to buy 10 Homebase stores and convert them into supermarkets in August.
Workers at Homebase’s head office in Milton Keynes as well as the remaining stores have jobs at risk.
UK high street shops that no longer exist
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The rescue deal comes after a hunt for a buyer from Homebase’s previous owners Hilco which is thought to have lasted for the last two months.
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Mr Dawson, whose CDS acts as parent company to The Range, also bought parts of high street retailer Wilko after it collapsed last year.
It is unclear which stores will remain branded as Homebase after the deal while administrators did not immediately disclose the locations of the 49 outlets which were not included in the deal.
The administrators said all employee wages and benefits will be paid for their period of employment while customer orders will still be fulfilled as far as possible.