-Together, Lowe's Canada
and RONA Have 539 Store Locations, Pro Forma Canadian
Revenues of C$6 Billion
Companies are Well-Positioned for Growth in Canada's Over C$45
Billion Home Improvement Market-
MOORESVILLE, N.C. and
BOUCHERVILLE, Quebec, May 20, 2016 /CNW/ -- Lowe's Companies, Inc.
(NYSE: LOW) ("Lowe's" or the "Company") today announced that it has
completed its previously announced acquisition of RONA inc.
("RONA"), 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 Canada including:
- 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 on June 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. Any questions regarding payment of
the consideration, including any request for another copy of the
Letter of Transmittal, should be directed to Computershare Investor
Services Inc. via telephone at 1-800-564-6253 (toll free in
North America) or via email at
corporateactions@computershare.com.
Advisors
CIBC World Markets Inc. and RBC Capital Markets served as
financial advisors to Lowe's in connection with the
Transaction. Stikeman Elliott LLP served as legal counsel to
Lowe's in Canada, and Hunton &
Williams LLP served as legal counsel to Lowe's in the U.S.
Scotia Capital Inc. served as exclusive financial advisor to
RONA. Norton Rose Fulbright Canada LLP served as legal
counsel to RONA.
About Lowe's Companies, Inc.
Lowe's Companies, Inc. (NYSE: LOW) is a FORTUNE® 50
home improvement company serving more than 17 million customers a
week in the United States,
Canada and Mexico. With fiscal year 2015 sales of
$59.1 billion, Lowe's has more than
2,355 home improvement and hardware stores and 285,000 employees.
Founded in 1946 and based in Mooresville,
N.C., Lowe's supports the communities it serves through
programs that focus on K-12 public education and community
improvement projects. For more information, visit Lowes.com.
Forward-Looking Statements
This news release includes "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995
including those regarding the acquisition by Lowe's Companies, Inc.
of RONA, inc. and the expected impact of the transaction on Lowe's
strategic and operational plans and financial results.
Statements including words such as "may", "will", "could",
"should", "would", "plan", "potential", "intend", "anticipate",
"believe", "estimate" or "expect" and other words, terms and
phrases of similar meaning are forward-looking statements.
Forward-looking statements involve estimates, expectations,
projections, goals, forecasts, assumptions, risks and
uncertainties. Such forward-looking statements include, but
are not limited to, statements or implications about the benefits
of the transaction, including future financial and operating
results, Lowe's plans, objectives, expectations and intentions,
expectations for sales growth, comparable sales, earnings and
performance, shareholder value, capital expenditures, cash flows,
the housing market, the home improvement industry, demand for
services, Lowe's strategic initiatives, any statement of an
assumption underlying any of the foregoing and other statements
that are not historical facts. Although we believe that the
expectations, opinions, projections, and comments reflected in
these forward-looking statements are reasonable, we can give no
assurance that such statements will prove to be correct. A wide
variety of potential risks, uncertainties, and other factors could
materially affect our ability to achieve the results either
expressed or implied by these forward-looking statements including,
but not limited to, changes in general economic conditions, such as
the rate of unemployment, interest rate and currency fluctuations,
fuel and other energy costs, slower growth in personal income,
changes in consumer spending, changes in the rate of housing
turnover, the availability of consumer credit and of mortgage
financing, inflation or deflation of commodity prices, and other
factors which can negatively affect our customers, as well as our
ability to: (i) respond to adverse trends in the housing industry,
such as a demographic shift from single family to multi-family
housing, a reduced rate of growth in household formation, and
slower rates of growth in housing renovation and repair activity,
as well as uneven recovery in commercial building activity; (ii)
secure, develop, and otherwise implement new technologies and
processes necessary to realize the benefits of our strategic
initiatives and enhance our efficiency; (iii) attract, train, and
retain highly-qualified associates; (iv) manage our business
effectively as we adapt our traditional operating model to meet the
changing expectations of our customers; (v) maintain, improve,
upgrade and protect our critical information systems from data
security breaches and other cyber threats; (vi) respond to
fluctuations in the prices and availability of services, supplies,
and products; (vii) respond to the growth and impact of
competition; (viii) address changes in existing or new laws or
regulations that affect consumer credit, employment/labor, trade,
product safety, transportation/logistics, energy costs, health
care, tax or environmental issues; and (ix) respond appropriately
to unanticipated failures to maintain a high level of product and
service quality that could result in a negative impact on customer
confidence and adversely affect sales. In addition, we could
experience additional impairment losses if either the actual
results of our operating stores are not consistent with the
assumptions and judgments we have made in estimating future cash
flows and determining asset fair values, or we are required to
reduce the carrying amount of our investment in certain
unconsolidated entities that are accounted for under the equity
method. For more information about these and other risks and
uncertainties that we are exposed to, you should read the "Risk
Factors" and "Critical Accounting Policies and Estimates" included
in our most recent Annual Report on Form 10-K to the United States
Securities and Exchange Commission (the "SEC") and the description
of material changes therein or updated version thereof, if any,
included in our Quarterly Reports on Form 10-Q or subsequent
filings with the SEC.
The forward-looking statements contained in this news release
are expressly qualified in their entirety by the foregoing
cautionary statements. All such forward-looking statements are
based upon data available as of the date of this release or other
specified date and speak only as of such date. All subsequent
written and oral forward-looking statements attributable to us or
any person acting on our behalf about any of the matters covered in
this release are qualified by these cautionary statements and in
the "Risk Factors" included in our most recent Annual Report on
Form 10-K to the SEC and the description of material changes, if
any, therein included in our Quarterly Reports on Form 10-Q or
subsequent filings with the SEC. We expressly disclaim any
obligation to update or revise any forward-looking statement,
whether as a result of new information, change in circumstances,
future events, or otherwise.
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SOURCE Lowe's Companies, Inc.