Rona, TruServe hammer a deal
Companies to merge after shareholders OK agreement
Advertisement
Read this article for free:
or
Already have an account? Log in here »
To continue reading, please subscribe:
Monthly Digital Subscription
$1 per week for 24 weeks*
- Enjoy unlimited reading on winnipegfreepress.com
- Read the E-Edition, our digital replica newspaper
- Access News Break, our award-winning app
- Play interactive puzzles
*Billed as $4.00 plus GST every four weeks. After 24 weeks, price increases to the regular rate of $19.95 plus GST every four weeks. Offer available to new and qualified returning subscribers only. Cancel any time.
Monthly Digital Subscription
$4.99/week*
- Enjoy unlimited reading on winnipegfreepress.com
- Read the E-Edition, our digital replica newspaper
- Access News Break, our award-winning app
- Play interactive puzzles
*Billed as $19.95 plus GST every four weeks. Cancel any time.
To continue reading, please subscribe:
Add Free Press access to your Brandon Sun subscription for only an additional
$1 for the first 4 weeks*
*Your next subscription payment will increase by $1.00 and you will be charged $16.99 plus GST for four weeks. After four weeks, your payment will increase to $23.99 plus GST every four weeks.
Read unlimited articles for free today:
or
Already have an account? Log in here »
Hey there, time traveller!
This article was published 02/10/2010 (5683 days ago), so information in it may no longer be current.
Winnipeg-based TruServ Canada has teamed up with Rona Inc. in a deal management from the two companies say will add depth to their retail offerings and enhance TruServ’s Winnipeg footprint.
The two companies announced Friday Rona will acquire TruServ, the company that was created from the ashes of the Macleod Stedman chain in the 1990s, and expand its dealer network to the 650 independent retailers TruServ services.
“This is just a tremendous opportunity for us,” said TruServ CEO Bill Morrison. “Rona made a very attractive offer and it will allow our dealer/owners to realize on their investment. This is not business as usual — this is better than usual.”
For hardware retailer Rona, it will mean broadening its market depth, especially in Ontario and Western Canada, and diversifying its business to make it less dependent on retail sales.
Rona president and chief executive officer Robert Dutton said TruServ will help make the company less vulnerable to the economic cycle.
“During the last recession, we realized that if we want to be less cyclical about the economic situation we had to increase the part of our business that is less cyclical, like the distribution business,” Dutton said.
He said the addition of a massive Winnipeg distribution centre (measuring 400,000 square feet) was an important part of the equation.
Morrison said all 300-plus of TruServ’s Winnipeg employees will be keeping their jobs and according to both him and Dutton, that number could grow.
“This is a good news story,” Dutton said. “We are in Winnipeg to create jobs.”
While TruServ has more than 40,000 products it distributes to its dealers, building materials are not part of that list. But for Rona, they account for about half of the company’s $4.7 billion in annual sales.
TruServ has two warehousing and distribution centres, one in Winnipeg and another in Kitchener, Ont., that serve more than 650 independent dealers, including stores under the True Value, V&S and Country Depot banners.
Earlier this year, Rona bought Plomberie Payette & Perreault Inc. to make it a part of its Noble Trade commercial and professional market division.
Rona also bought five Piercey’s stores in the Halifax area for an undisclosed price from the Bragg Group in the summer. The Piercey’s stores included lumberyards and one of the biggest fleets of construction materials and hardware delivery trucks in Nova Scotia.
TruServ chairman Pierre Levesque said it was an excellent opportunity for TruServ and its shareholders.
“Joining forces with Rona would further strengthen our ability to offer independent retailers access to products and services needed to compete in today’s market,” Levesque said in a statement.
The deal is expected to close before the end of the year.
Although terms of the deal were not disclosed, it is expected to create a windfall for TruServ’s more than 400 dealer-owners, many of whom operate small-town stores and might have had a hard time finding buyers when it came time for individual owners to retire.
“This will be an excellent way for dealers to see a payout for the equity they have put into the business,” Morrison said.
The companies said the agreement, which requires approval by TruServ’s shareholders, has the support of its board of directors and Growmark Inc., which holds a 29 per cent stake in the company.
Company officials said the arrangements dealers have with TruServ will continue to be honoured with Rona as the new owner.
The announcement of the deal seems likely to have been tied to this weekend’s semi-annual trade show TruServ holds to allow its dealers to meet company officials, see the products first-hand and book orders for the busy fall season.
More than 400 major manufacturers will showcase products at the trade show, which is being held at the Winnipeg Convention Centre.
Rona shares (TSX:RON) closed up a penny at $13.31 on the Toronto Stock Exchange on Friday.
martin.cash@freepress.mb.ca