Mooresville, S.C. – Sycamore Partners has signed a definitive agreement to acquire the 450-store operation that comprises Lowe’s Canadian retail division.
The deal includes Lowe’s Canada, which like its U.S. counterpart sells home furnishings and furniture online; Rona, a home renovation and construction retailer that sells home furnishings and furniture online; Réno-Dépôt, a home supply chain that sells decorative home furnishings online; and Dick’s Lumber, a building supplies chain.
The deal was made for $400 million in cash along with a performance-based deferred consideration. The transaction is expected to close in early 2023, subject to closing conditions and regulatory approvals.
In connection with the preparation of the company’s financial statements for the third quarter of 2022, Lowe’s expects to record a pre-tax non-cash impairment charge of approximately $2.0 billion related to its Canadian retail business.
“The sale of our Canadian retail business is an important step toward simplifying the Lowe’s business model,” said Marvin R. Ellison, Lowe’s chairman, president and CEO. “While this business represents approximately 7% of our full year 2022 sales outlook, it also represents approximately 60 basis points of dilution on our full year 2022 operating margin outlook,”
Sycamore Partners was among the companies that prepared bids last spring to acquire Kohl’s, which ultimately did not get sold and remains a publicly traded company. The private equity firm acquired the Belk regional department store chain 2015. Among its other retail holdings, it owns Staples, Ann Taylor/Loft, Express and Lane Bryant.