Lowe’s Announces Sale of Canadian Retail Business to Sycamore Partners

Lowe’s Companies, Inc. (“Lowe’s”) announced that it has entered into a definitive agreement to sell its Canadian retail business to Sycamore Partners, a private equity firm specializing in retail, consumer and distribution-related investments, for $400 million in cash, and performance-based deferred consideration.

Based in Boucherville, Quebec, Lowe’s Canadian retail business operates or services approximately 450 corporate and independent affiliate dealer stores in a number of complementary formats under different banners, which include RONA, Lowe’s Canada, Réno-Dépôt and Dick’s Lumber.

“The sale of our Canadian retail business is an important step toward simplifying the Lowe’s business model. 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,” said Marvin R. Ellison, Lowe’s chairman, president and CEO.

“We remain confident in our short and long-term outlook for the U.S. business, underscored by improved  sales trends and strong profit flow-through in the third quarter, as well as our expectations for solid business performance for the remainder of 2022. By executing this transaction, we will intensify our focus on enhancing our operating margin and ROIC, taking market share in the U.S. and creating greater shareholder value,” Ellison continued. “I want to thank our entire Canadian team for their hard work and dedication to our customers. We look forward to working with Sycamore Partners in executing a seamless transition.” 

“We are honored to partner with Lowe’s to establish Lowe’s Canada and RONA as a standalone company headquartered in Boucherville, Quebec,” said Stefan Kaluzny, Managing Director of Sycamore Partners. “We look forward to working with the company’s management team to build on its 83-year history as a leading Canadian home improvement business serving families, builders, and contractors in their communities across the country.”

“We are excited to work with Sycamore Partners on this next chapter of growth for our business.” said Tony Cioffi, president of Lowe’s Canada. “Together, we will remain committed to supporting our associates, our Canadian- and Quebec-based vendors and our dealer network.”

The transaction is expected to close in early 2023, subject to customary closing conditions and regulatory approvals. In connection with the preparation of the company’s financial statements for the third quarter of 2022, the company expects to record a pre-tax non-cash impairment charge of approximately $2.0 billion related to its Canadian retail business.

Lowe’s Business Outlook

The company is reaffirming its current full year 2022 outlook, exclusive of the asset impairment and impacts of deal-related transaction costs.

The Canadian retail business represents approximately 7% of consolidated full year 2022 sales outlook, and approximately 60 basis points of dilution on the consolidated full year 2022 operating margin outlook.

About Lowe’s

Lowe’s Companies, Inc. (NYSE: LOW) is a FORTUNE^® 50 home improvement company serving approximately 19 million customer transactions a week in the United States and Canada. With fiscal year 2021 sales of over $96 billion, Lowe’s and its related businesses operate or service nearly 2,200 home improvement and hardware stores and employ over 300,000 associates. Based in Mooresville, N.C., Lowe’s supports the communities it serves through programs focused on creating safe, affordable housing and helping to develop the next generation of skilled trade experts. For more information, visit Lowes.com.

About Sycamore Partners

Sycamore Partners is a private equity firm based in New York. The firm specializes in retail, consumer, and distribution-related investments and partners with management teams to improve the operating profitability and strategic value of their business. With approximately $10 billion in aggregate committed capital raised since its inception in 2011, Sycamore Partners’ investors include leading endowments, financial institutions, family offices, pension plans and sovereign wealth funds. For more information on Sycamore Partners, visit www.sycamorepartners.com.

Contact:

Kate Pearlman – Shareholder/Analyst Inquiries – kate.pearlman@lowes.com – (704) 775-3856

Source: Lowe’s Companies, Inc.