Cobb-headquartered retail giant The Home Depot announced in a press release that they have reached an agreement to purchase HD Supply Holdings, Inc.
The Home Depot will purchase all outstanding shares of HD Supply Holdings common stock for $56 per share, which will amount to approximately $8 billion.
HD Supply Holdings distributes maintenance, repair and operations (MRO) products to multifamily and hotel end markets.
Home Depot expects the acquisition to make them a leader in the MRO market.
“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 $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.”
“We’re thrilled that our associates are joining the Home Depot team and that our customers will be able to benefit from a broader product assortment, expanded delivery options and enhanced services nationally,” said Joe DeAngelo, chairman and CEO, HD Supply. “We are confident that this will position both The Home Depot and HD Supply for continued growth and success in the MRO distribution space.”
The sale is subject to regulatory approvals and and dependent on The Home Depot’s success in purchasing a majority of the shares.
The Home Depot expects to have the acquisition completed by January 1, 2021. It will be funded by cash on hand and debt.
“We plan to access the debt capital markets to raise incremental indebtedness in support of this acquisition. We also expect the transaction to be accretive to earnings in fiscal 2021, with potential for significant shareholder value creation over the longer term,” said Richard McPhail, executive vice president and CFO.