Boucherville, Quebec-based Rona announced it has signed a deal to purchase dealer-owned, wholesale distributor TruServ Canada.
“This proposed acquisition represents an important step in our strategy to accelerate the consolidation of the Canadian renovation-construction industry and is exactly in line with our objective to continually strengthen our leadership position in the distribution business, which is the roots of our company,” said Robert Dutton, president and CEO of Rona.
Winnipeg, Manitoba-based TruServ Canada has two warehousing and distribution centers—one 400,000-sq.-ft. facility in Winnipeg and one 250,000-sq.-ft. facility in Kitchener, Ontario, where it supplies more than 40,000 SKUs with another 80,000 direct-shipment options. “By serving 650 new dealers, the acquisition of TruServ Canada would provide instant geographical penetration in many Canadian communities, particularly in Ontario and Western Canada, thus creating important growth opportunities. The proposed acquisition would also diversify the network of dealer stores served by Rona by adding hardware, general merchandising and agriculture-specialized stores and would therefore increase our ability to serve small and mid-size specialized dealers across Canada,” Dutton said.
The transaction is expected to close by the end of the year.
In related news, Rona’s announcement of its intent to purchase Don Park LP, an HVAC distributor and manufacturer based in Ontario, is “another step toward achieving Rona’s objective of establishing a national platform in the commercial and professional market,” according to a company statement released Oct. 7. This hedge against traditional DIY sales may help Rona, Canada’s largest retailer and wholesaler, expand a lot farther south than Quebec.
According to an article in the Telegraph Journal, Rona has recently hired an employee that will help it target similar market opportunities in the United States.
“We’re hoping to have an acquisition in the United States in 2011; it all depends if we identify the right series of targets and the right markets,” Michael Storfer, VP of Rona’s commercial division, told the New Brunswick newspaper.