Parties
Company
Lowe's Companies, Inc.
Company
Sycamore Partners
Lowe's Companies, Inc. has announced a definitive agreement to sell its Canadian retail segment to Sycamore Partners, a private equity firm, for $541.4 million (US$400 million) in cash along with performance-based deferred consideration. The Canadian unit, headquartered in Boucherville, Quebec, operates or services about 450 stores across various banners including RONA, Lowe's Canada, Réno-Dépôt, and Dick's Lumber. This sale is a strategic move by Lowe's to simplify its business model; the Canadian operations represent about 7% of Lowe's 2022 sales outlook. The company's chairman, Marvin R. Ellison, emphasized the focus on the U.S. market for growth. Sycamore Partners expressed enthusiasm about the acquisition, aiming to strengthen Lowe's Canada and RONA's presence in the Canadian market. The deal is set to conclude in early 2023, pending customary closing conditions and regulatory approvals. Lowe's also indicated an expected pre-tax non-cash impairment charge of roughly $2.0 billion in relation to its Canadian retail operations. The company's 2022 financial outlook remains unchanged, excluding the mentioned impairment and transaction costs. Regarding advisors on the deal, Lowe's engaged Goldman Sachs & Co. LLC as their financial adviser and Cleary Gottlieb Steen & Hamilton LLP along with Stikeman Elliott LLP as legal counsel. Sycamore Partners sought financial advice from RBC Capital Markets, with Kirkland & Ellis LLP and Blake, Cassels & Graydon LLP providing legal counsel.
Deal Type
Merger & AcquisitionIndustry
OtherTransaction
$ 541,400,000Deal Status
ClosedClosing Date
03 February 2023