RONA Announces an Agreement to Sell Its Commercial and Professional Market Division to EMCO Corporation

BOUCHERVILLE, QUEBEC--(Marketwired - June 20, 2013) - RONA inc. (TSX:RON)(TSX:RON.PR.A), the largest Canadian distributor and retailer of hardware, renovation and gardening products, announces it has entered into an agreement to dispose of the assets of its Commercial and Professional Market division specializing in plumbing, heating, ventilation and air conditioning (HVAC) systems. The division will be acquired by Talisker Plumbing Corporation, a subsidiary of EMCO Corporation.

The Commercial and Professional Market division was created when RONA acquired Noble in 2007. It then grew over the years, organically and through acquisitions. With 1,400 employees in Ontario, Quebec and British Columbia, the Commercial and Professional Market division has been operating under the Noble, Don Park, MPH Supplies, Boutique Eaudace and Boutique Plomberie Décoration 25 banners.

In line with its strategic priorities, RONA has been focusing on unlocking the full potential of its retail and distribution business. In this context, selling its Commercial and Professional Market division to EMCO is the right decision for employees, customers and shareholders. The transaction, which is subject to regulatory approvals, is expected to net a total cash consideration of approximately $215 million (after transaction expenses and fees), subject to working capital adjustments.

"Since 2007, we've been working with a group of skilled and dedicated employees who have helped build this business. We take this opportunity to sincerely thank them for their commitment. After all these years, we know we can count on them for their continued support in this transition," said Dominique Boies, RONA's Executive Vice President and Chief Financial Officer.

"RONA's Commercial and Professional Market division has become a strong and unique business through its culture of outstanding customer service. We are proud to welcome its valued employees, suppliers and customers into our family. All locations will continue to operate under the same brand names and under the same leadership. As well, customers will continue to receive the excellent quality of service they have come to expect. We are committed to valuing and reinforcing the service culture so evident across the division while providing our new teammates with opportunities to develop themselves and their business," said Rick Fantham, President of EMCO Corporation.

The Commercial and Professional Market division will be classified as a discontinued operation. Consequently, RONA is required to measure the value of assets held for sale. The Corporation is currently expecting to record, in the second quarter of 2013, a pre-tax loss of approximately $125 million resulting from the transaction, mostly related to a write-down of the division's goodwill.

Scotiabank acted as financial advisor to RONA and Norton Rose Fulbright acted as legal advisor.

About EMCO Corporation

EMCO Corporation, based in London, Ontario, is a wholesaler-distributor of products for the construction industry. EMCO offers products in the distinct categories of plumbing and heating, waterworks, industrial, oilfield supply, irrigation, fire protection and HVAC/R (heating, ventilation, air conditioning and refrigeration) through its locations across Canada.

About RONA

RONA is the largest Canadian distributor and retailer of hardware, home renovation and gardening products. The Corporation operates a network of over 800 corporate, franchise and affiliate retail stores of various sizes and formats under different banners, and a network of 14 hardware and construction materials distribution centres. With close to 28,000 employees, the RONA store network generates consolidated revenues of $4.9 billion. (Data as at March 31, 2013.) For more information, visit www.rona.ca.

Forward-looking statements

This Press Release includes "forward-looking statements" that involve risks and uncertainties. All statements other than statements of historical facts included in this Press Release, including statements regarding the prospects of the industry and prospects, plans, financial position and business strategy of the Corporation may constitute forward-looking statements within the meaning of the Canadian securities legislation and regulations. Investors and others are cautioned that undue reliance should not be placed on any forward-looking statements.

For more information on the risks, uncertainties and assumptions that would cause the Corporation's actual results to differ from current expectations, please also refer to the Corporation's public filings available at www.sedar.com and www.rona.ca. In particular, further details and descriptions of these and other factors are disclosed in the MD&A under the "Risks and uncertainties" section and in the "Risk factors" section of the Corporation's current Annual Information Form.

The forward-looking statements in this Press Release reflect the Corporation's expectations as at June 20, 2013, and are subject to change after this date. The Corporation expressly disclaims any obligation or intention to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by the applicable securities laws.