Rona Inc. Builds Hardware Holdings with Cashway Acquisition

The aggressive pace of acquisitions as major players seek to expand into new markets was recently illustrated when Quebec-based RONA Inc., the leading distributor and retailer of hardware, renovation and gardening supplies in eastern Canada, announced on March 6, 2000 that it had entered into an agreement to acquire Cashway Building Centres Ltd. (Cashway), Ontario’s third-largest hardware store with 61 stores, for approximately $50 million. Under the agreement, RONA will purchase all the shares in Cashway as well as the Cashway stores belonging to subsidiaries of a Cashway shareholder, Russel Metals Inc. This strategic acquisition is part of RONA’s plan to invest more than $400 million over the next two years in an effort to become a leading player in Ontario’s $8 billion hardware, building materials and home improvement market.

RONA’s corporate and legal affairs director, France Charlebois, called on Ogilvy Renault (in both Toronto and Ottawa) to co-ordinate and lead the share purchase and asset purchase transactions on its behalf. Ogilvy’s team was headed by corporate/commercial lawyer David C. Gavsie and included Jean-Pierre Colpron (Montreal), Norman B. Lieff (real estate), Barn-Yen Li (corporate), Sandra Nissan (corporate), Craig Johnston (finance), Ken Snider (tax) and Michael McFadden (employment and labour). Pierre-Yves Châtillon of Desjardins Ducharme Stein Monast, RONA’s outside corporate counsel, and Jean Lamothe of Stikeman Elliott (Montreal), who represented RONA on its financing, both assisted RONA as required. Meighen Demers quarterbacked the Cashway side of the transaction and represented Cashway in its new financings. Corporate finance partner, Merie-Anne Beavis led the team which included Nicholas Williams (corporate finance and banking), Geoffrey Walker (tax), Ashutosh Gupta (tax), and David Amato (corporate finance and banking). Jacques Demers, a director of Cashway, assisted in negotiation of the key business issues. Russel Metals Inc., a significant shareholder and owner of Cashway-leased real properties was represented by Carol Hansell, Michael Brisson and Kent Beattie of Davies, Ward & Beck. Gowling, Strathy & Henderson’s Jeffrey Goldenthal, Patricia MacDonald and Harold Chataway represented Cashway’s new operating lender, Bank of America Canada, while Barry Tarshis and Susan Redmayne of Smith Lyons advised the new term lender, First Treasury, and Bill Robertson of Borden Ladner Gervais LLP acted for the Bank of Nova Scotia, Cashway’s former lender which had financed its management buy-out in 1995.


Jacques Demers Susan P. Redmayne Nicholas C. Williams Pierre-Yves Châtillon David M.A. Amato Sandra Nissan Merie-Anne E. Beavis William S. Robertson R. Michael Brisson Carol Hansell Norman B. Lieff Jean-Pierre Colpron Ashutosh Gupta Michael G. McFadden Jean G. Lamothe Jeffrey D. Goldenthal Patti MacDonald Craig M. Johnston Barry Tarshis Harold Chataway Kenneth J. Snider Geoffrey Walker David C. Gavsie