Rona to sell commercial, professional division for $215M
Selling to Talisker Plumbing Corp., subsidiary of London, Ont.-based EMCO
BOUCHERVILLE, Que.—Hardware and home renovation company Rona Inc. says it will sell its commercial and professional division to EMCO subsidiary Talisker Plumbing Corp. for $215-million.
The division, which specializes in plumbing, heating, ventilation and air conditioning systems, was created when Rona acquired commercial trades supplier Noble in 2007.
It has 1,400 employees in Ontario, Quebec and British Columbia operating under the Noble, Don Park, MPH Supplies, Boutique Eaudace and Boutique Plomberie Decoration 25 banners.
A sale of the unit was expected as part of Rona’s drive to improve its profitability by focusing on its retail and distribution business.
The transaction is subject to regulatory approvals and is expected to generate $215-million in cash after transaction expenses and fees, subject to working capital adjustments.
EMCO president Rick Fantham said all division locations will continue to operate under the same brand names and leadership.
He said EMCO is 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.”
Rona’s chief financial officer Dominique Boies thanked employees who helped to build this business over six years.
The Montreal-area company said it expects to record a pre-tax loss of about $125-million in the second quarter mostly related to a write-down of the division’s goodwill.
EMCO, based in London, Ont., is a wholesaler and distributor of products for the construction industry.
It sells products across Canada in plumbing and heating, waterworks, industrial, oilfield supply, irrigation, fire protection and HVAC/R (heating, ventilation, air conditioning and refrigeration).
Rona operates a network of more than 800 retail stores and 14 hardware and construction materials distribution centres.
It has nearly 28,000 employees and generated $4.9-billion of annual revenues.