Home improvement retailer Rona Inc. says it will buy Réno-Dépôt, which operates Building Box stores, for $350-million, giving it more of a presence in Quebec.
The deal for the Réno-Dépôt Inc. from its parent from British Kingfisher PLC gives the Boucherville, Que.-based company 14 sites in Quebec and six in Ontario, with a work force of 4,300 and 2.1 million in space.
Kingfisher said in March that it will exit its Réno-Dépôt operations in Canada as part of a radical reshaping of its international home improvement business.
"This transaction will ensure the future of a strong Canadian competitor in all the regions of the country and in all segments of the industry," Robert Dutton, president and CEO of Rona, said.
"For Canadian consumers this assurance represents an added benefit of Rona's increased competitiveness."
In 2002, Réno-Dépôt reported sales of $846.6-million and operating profit of $57.6-million, the company said. Included in the purchase price is real estate with book value of $93-million.
It sees synergies of about $35-million a year related to marketing costs, purchasing volume and "more advantageous purchasing conditions."
A profitable transaction RONA expects the transaction to be immediately accretive to its earnings.
The company said it may offer an equity offering when market conditions improve.
RONA operates 527 franchised, affiliated and corporate stores with a work force of 16,000. The company's annual sales come in around $3-billion.