Lowe's sells its Canadian division to US equity firm

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American home improvement retailer Lowe’s announced today it has sold its Canadian business to Sycamore Partners for $400 million.

Lowe’s Canada brands include not only Lowe’s, but also Dick’s Lumber, Réno-Dépôt, and Canadian giant Rona, which was acquired by Lowe’s in 2016 in a deal worth $3.2 billion.

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

Sycamore Partners is a New York-based private equity firm specializing in retail and consumer investments. It is perhaps best known for its ownership of Staples, Hot Topic, Talbots, Express, and Azamara Cruises.

Under the new ownership, Lowe’s Canada and Rona will remain a standalone company headquartered in Boucherville, Quebec.

The deal is expected to close in early 2023, subject to customary closing conditions and regulatory approvals. As part of the deal, Lowe’s is also expected to record a pre-tax non-cash impairment charge of about $2 billion related to its Canadian retail business, which is generally the value of assets that have dropped or completely lost their worth.

In recent years, Lowe’s Canada has been downsizing its brick-and-mortar presence — a strategy that was already underway before the pandemic. In 2019 alone, it announced the closure of at least 34 underperforming stores under the Lowe’s and Rona brands across the country.

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