RONA INC.
TSX : RON
TSX : RON.PR.A

RONA INC.

July 16, 2015 08:37 ET

RONA Announces Signing of Letter of Intent to Acquire All Franchise Stores in its Network

BOUCHERVILLE, QUEBEC--(Marketwired - July 16, 2015) - RONA inc. (TSX:RON) (TSX:RON.PR.A) announces it has signed a letter of intent to acquire the 20 franchise stores in its network, 17 big-box stores and three proximity stores, operating under the banners RONA, RONA L'entrepôt and RONA Home & Garden. The stores, 18 in Quebec and two in Ontario, have a combined workforce of 2,600 employees and generate over $500 million in retail sales.

"This transaction is in line with our ongoing recovery and banner repositioning plan launched just over a year ago. By consolidating these stores, we will be able to simplify our business model and focus on the sales of our independent dealers, who operate over 275 affiliated stores across Canada, and on our network of corporate stores.

We are excited about pursuing the development of the stores affected by this transaction, which occupy an enviable position in their respective regions. I thank the franchise owners for their contribution to the success of the businesses involved and for their tremendous work over the past two decades and we are counting on the cooperation of the current employees in maintaining these stores' success," said Robert Sawyer, President and CEO of RONA.

The network of 79 big-box stores across Canada will now be wholly owned by RONA.

The closing of this transaction is conditional on a due diligence review of the business of each of the stores, to RONA's satisfaction, and on the negotiation and signing of agreements to purchase and related documentation by RONA and each of the sellers, subject to the approval of RONA's Board of Directors and the customary regulatory approvals. The acquisition will be funded by RONA's cash flow from operations and credit facility and will contribute to profits in its first year.

About RONA

RONA inc. is a major Canadian distributor and retailer of hardware, building materials and home renovation products. The Corporation operates a network of over 500 corporate, franchise and independent affiliate stores of complementary formats. With its 9 distribution centers, RONA serves its own network as well as many independent dealers operating under different banners, including Ace for which RONA owns the licensing rights and is the exclusive distributor in Canada. With the help of its nearly 24,000 employees, the Corporation generates annual consolidated sales of $4.1 billion. For more information, visit www.rona.ca.

Contact Information

  • Media
    Valerie Gonzalo
    Media Relations
    514-599-5900 ext. 5271
    media@rona.ca

    Financial Community
    Andre Lavoie
    Vice-President, Finance and Investor Relations
    514-599-5900 ext. 8356
    andre.lavoie@rona.ca