Lowe’s Cos. has unloaded its Canadian division to a U.S. private equity company.
Sycamore Partners said it has completed its acquisition of Lowe's Canadian retail business, which will now operate under the name RONA inc. The deal was announced in November, with the private equity firm entering into an agreement to purchase the business for $400 million in cash, plus a performance-based deferred consideration.
With headquarters in Boucherville, Québec, RONA operates or services approximately 450 corporate and independent affiliate dealer stores under several banners, including RONA, Lowe's, Réno-Dépôt and Dick's Lumber.
Lowe's acquired Rona Inc. in 2016 in a deal valued at about $2.4 billion.
"We are excited to announce that RONA is once again an independent company headquartered in Boucherville, Quebec," said Stefan Kaluzny, managing director of Sycamore Partners. "We are honored that Lowe's has entrusted Sycamore Partners to lead RONA into its next chapter and build upon RONA's 84-year history serving communities across Canada. We look forward to working with RONA's 26,000 associates and over 200 dealer partners to meet the home improvement needs of Canadian families, builders, and contractors."
In announcing the deal in November, Lowe’s chairman and CEO Marvin Ellison called the sale “an important step toward simplifying the Lowe's business model.”
“By executing this transaction, we will intensify our focus on enhancing our operating margin and ROIC, taking market share in the U.S. and creating greater shareholder value," Ellison said.
"Today's announcement represents the beginning of a new chapter in RONA's long and rich history," said Tony Cioffi, president of RONA inc. "With Sycamore's support and expertise, we will continue to provide outstanding service and products for our customers' home improvement and construction projects."
About Sycamore Partners
Sycamore Partners is a private equity firm based in New York. The firm specializes in retail, consumer, and distribution-related investments and partners with management teams to improve the operating profitability and strategic value of their business.