Lowe’s Companies, Inc. on Friday announced in Boucherville, Quebec and Mooresville, N.C., that it has completed its previously announced acquisition of RONA Inc. (, in a transaction valued at C$3.2 billion (US$2.4 billion).
The acquisition represents a key step in accelerating Lowe’s growth strategy. It creates one of the largest home improvement retailers in Canada, with 539 store locations and pro forma revenues from Canadian operations of approximately C$6 billion. As a result, Lowe’s Canada and RONA are well-positioned for continued success serving Canada’s over C$45 billion and growing home improvement market.
“We are very pleased to welcome RONA and its talented team into the Lowe’s family,” said Richard D. Maltsbarger, Lowe’s chief development officer and president of international. “This transaction significantly expands our presence in the Canadian market and provides attractive opportunities to drive revenue and profit growth while delivering meaningful long-term benefits to shareholders, customers, suppliers, employees and the communities we serve. We look forward to capitalizing on the significant potential created by bringing together our two great companies.”
Robert Sawyer, former president and CEO of RONA, added, “I am confident that RONA will be in good hands as part of Lowe’s and will have new opportunities and resources to grow its brands and build upon its heritage, providing Canadians with trusted products and advice to build and renovate their homes in total confidence. This is an excellent next step for our people, our partners, our customers and our former shareholders.”
The Canadian operations are led by Sylvain Prud‘homme, president and CEO of Lowe’s Canada. “We are delighted to join forces with RONA’s experienced team to take our businesses to the next level,” said Prud’homme. “With the closing now behind us, we have hit the ground running and are focused on assuring a smooth transition and taking full advantage of the outstanding opportunities we see as one of Canada’s leading home improvement retailers.”
Lowe’s Commitments in Canada
As previously announced, as part of its acquisition of RONA, Lowe’s made certain key commitments in Canadaincluding:
- headquartering the Canadian businesses in Boucherville, Quebec;
- maintaining RONA’s multiple retail store banners;
- enhancing distribution services to dealer owners;
- continuing RONA’s employment of the vast majority of its current employees and maintaining key executives from RONA’s strong leadership team;
- continuing RONA’s local and ethical procurement strategy and potentially expanding relationships both Lowe’s and RONA have developed with Canadian manufacturers and suppliers; and
- continuing to support Canadian communities through RONA and Lowe’s charitable and environmental initiatives.
RONA brings to Lowe’s a network of 496 corporate and dealer-owned stores in a number of complementary formats, as well as nine distribution centres serving corporate stores, dealer owners operating under various banners, and Ace for which RONA owns the licensing rights and is the exclusive distributor in Canada.
As mentioned in RONA’s first quarter earnings press release issued on May 10, 2016, dividends on common shares declared by RONA’s board of directors on May 9, 2016, to be paid on June 23, 2016 to shareholders of record on June 8, 2016, will not be paid according to the plan of arrangement since closing will occur before the payment date. A quarterly dividend of $0.20775 per share on cumulative and fixed 5-year Rate Reset Series 6 Class A preferred shares, as well as a quarterly dividend of $0.19384 per share on cumulative and variable 5-year Rate Reset Series 7 Class A preferred shares will be paid on June 30, 2016 to shareholders of record onJune 15, 2016 as these preferred shares are no longer part of the plan of arrangement and will continue to trade after closing. RONA’s annual meeting of shareholders, initially scheduled to be held on June 20, 2016, has been cancelled in light of the completion of the Arrangement.
Registered common shareholders of RONA (“RONA Shareholders”) must submit the share certificates representing their RONA common shares and complete, execute and submit the Letter of Transmittal sent to them with the other materials for the special meeting of RONA shareholders held on March 31, 2016 in order to receive the consideration to which they are entitled. RONA Shareholders who have not yet submitted their share certificates and Letters of Transmittal are encouraged to do so as soon as possible. – CNW