Description: Sycamore Partners, a private equity firm located in New York, is buying retailer Rona, along with several related parties, from Lowes. Lowes said it is making the sale in a move to simplify its business model. Sycamore is paying $400 million for the deal along with additional compensation that will depend upon performance.
Date: November 3, 2022
1) As you read the article, did you consider how much the value of Rona had changed since Lowes first purchased it?
2) What factors may have been behind the change in value for Rona since Lowes purchased it in 2016?
3) Starting on page 11-22 of Wiley’s Financial Accounting: Tools for Business Decision-Making we see a discussion of the shareholders’ equity section of the balance sheet. What options are available to a privately held company that are unavailable to a publicly traded company?