Inside Logistics

Home Depot buys HD Supply

Deal worth about US$8 billion


November 17, 2020
by

ATLANTA – The Home Depot will acquire HD Supply Holdings, Inc., a North American distributor of maintenance, repair and operations (MRO) products in the multifamily and hospitality end markets.

“The MRO customer is highly valued by The Home Depot, and this acquisition will position the company to accelerate sales growth by better serving both existing and new customers in a highly fragmented US$55 billion marketplace,” said Craig Menear, chairman and CEO of The Home Depot.

“HD Supply complements our existing MRO business with a robust product offering and value-added service capabilities, an experienced salesforce that enhances the strong team we have in place, as well as an extensive, MRO-specific distribution network throughout the U.S. and Canada.”

A subsidiary of The Home Depot will offer to purchase all outstanding shares of HD Supply common stock for $56 per share, for a total enterprise value (including net cash) of approximately $8 billion.

The closing of the tender offer is subject to customary closing conditions, including regulatory approvals and the tender of a majority of the shares of HD Supply common stock then outstanding (on a fully diluted basis) and is expected to be completed during The Home Depot’s fiscal fourth quarter, which ends on January 31, 2021. The transaction is expected to be funded through cash on hand and debt.

The Home Depot is the world’s largest home improvement specialty retailer, with 2,295 retail stores in all 50 states, the District of Columbia, Puerto Rico, U.S. Virgin Islands, Guam, 10 Canadian provinces and Mexico. In fiscal 2019, The Home Depot had sales of $110.2 billion and earnings of $11.2 billion. It employs more than 400,000.

HD Supply is one of the largest wholesale distributors in North America. The company provides a broad range of products and value-add services to approximately 300,000 customers in the living space maintenance, repair and operations sector. It operates approximately 44 distribution centres across 25 states and two Canadian provinces.