EDMONTON - The Brick, a retailing giant that started in Edmonton with a single store, is being acquired by rival Leons Furniture in a stunning $700-million deal, the companies announced Sunday.
We welcome this opportunity to partner with this iconic corporation, said Vi Konkle, president and CEO of The Brick, in a statement.
By joining forces, we can strengthen both of our businesses, enhancing everything that has made Leons and The Brick two of Canadas best-known retailers and preserving The Bricks roots in Edmonton.
The news will be formally announced in a news conference scheduled for Monday morning in Toronto.
Brick founder William (Bill) Comrie and several other major shareholders, who together own about two-thirds of the companys shares and warrants, have agreed to sell their holdings for $5.40 a share and $4.40 per warrant to Leons. The deal is expected to close in the first three months of 2013, subject to certain conditions, including court approval and any relevant regulatory approvals.
The Brick and Leons will continue to operate as separate banners out of their respective headquarters in Edmonton and Toronto, respectively, the companies said in a release.
This transaction brings together two great Canadian companies with complementary geographic footprints to strengthen our position in the home furnishings marketplace, said Terry Leon, president and CEO of Leons.
Leon said combining the might of two of Canadas biggest home furnishings retailers will benefit both consumers and the companies.
We will apply the best practices of both companies to offer even greater value to our customers and create more opportunity for our associates. Our combined team will have access to national buying opportunities in merchandising and marketing, and a national distribution network that will enable us to greatly enhance our online shopping capabilities.
Leon also acknowledged both companies long history and Canadian roots.
During these economic times where we have seen multiple American corporations make inroads in our country through acquisitions, it is a pleasure to see two successful Canadian retailers reach such an agreement that will better serve Canadian consumers, Leon said.
Leon will remain as CEO of Leons and will be CEO of the combined entity. Konkle will continue as President of The Brick.
Leons was founded by Leons grandfather, Ablan Leon, a Lebanese immigrant, in 1909. The company has 76 stores in Newfoundland and Labrador, Quebec, Ontario, Manitoba, Saskatchewan, Alberta, Nova Scotia, New Brunswick, and Prince Edward Island.
The Brick has become an iconic Edmonton company since its start in 1971.
According to the companys website, Bill Comrie moved into the furniture business at 19, following the sudden passing of his father Herb in 1969. Bill had just been drafted by the Chicago Blackhawks and was to report to training camp that fall when he chose to shelve a promising hockey career to support the family business.
Comrie opened Bill Comries Furniture Warehouse, and later moved it to a new downtown location and renamed it The Brick Warehouse.
The company has since grown to 230 stores operating under The Brick, United Furniture Warehouse, The Brick Mattress Store and Urban Brick banners.
The Brick survived near disaster about three years ago when it struggled through a painful recapitalization and brought in a new management team.
It recently paid back more than $77 million of a crippling $120-million debt with a weighty 12-per-cent interest rate. The company took on that burden when it sought emergency funding during a business downturn three years ago when its stock fell from more than $9 in 2008 to $1 in early 2009. Its biggest bondholders were Fairfax Financial Holdings and founder Bill Comrie.
The purchase of such a well-known homegrown company raised eyebrows in Edmonton.
It caught everybody by surprise, said Paul McElhone, executive director of the School of Retailing at the University of Alberta.
McElhone said he had believed Comries eldest son Paul Comrie would one day lead the company. If there was no succession plan, if there was nobody in the wings, I could understand it, and the fact that theres been no rumblings in the industry at all.
As an Edmontonian business person that always celebrates homegrown entrepreneurial businesses that grow and become national in scope like Running Room, Booster Juice, Fountain Tire Im shocked and a little disappointed that were not going to keep the entrepreneurial spirit going in Edmonton, but I understand this is a new chapter for them and this is what happens in contemporary retail business.
Surjit Rai, associate chairman of the Bachelor of Business Administration degree at NAIT, said, It is quite a surprise because it is seen as an Edmonton landmark.
I dont think its going to affect consumers down on the ground. If anything, it just gives Leons more geographic stretch across the country and higher revenues.
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