Latest news with #SRSDistribution
Yahoo
5 hours ago
- Business
- Yahoo
Home Depot goes after pro market with $4.3B acquisition
This story was originally published on Retail Dive. To receive daily news and insights, subscribe to our free daily Retail Dive newsletter. The Home Depot is again bolstering its offering for pro customers. The home improvement company has struck a deal for its subsidiary SRS Distribution to acquire specialty building products distributor GMS Inc, subject to customary closing conditions. A subsidiary of SRS will purchase all outstanding shares of GMS' common stock for $110 per share for a total equity value of about $4.3 billion. 'Acquiring GMS represents a next logical step in [Home Depot's] deep dig into the Pro distribution channel,' Wells Fargo analysts led by Zachary Fadem said in emailed comments Monday. The deal, which is expected to close by the end of this fiscal year, will be funded through cash on hand and debt. Including debt, the transaction is valued at about $5.5 billion, the companies announced Monday. "The combination of GMS and SRS will provide the residential and commercial Pro customer with more fulfillment and service options than ever before,' Dan Tinker, CEO of SRS, said in a statement. 'Together, we'll create a network of more than 1,200 locations and a fleet of more than 8,000 trucks capable of making tens of thousands of jobsite deliveries per day.' This move is expected to accelerate SRS's goals of becoming a multi-category building distributor. GMS' business focuses on specialty building materials, including drywall, ceilings, steel frames and other products for residential and commercial construction and remodeling projects. It will also expand SRS' distribution footprint in the U.S. and Canada, the company said in its announcement. This also strengthens Home Depot's position among pro customers. The home improvement retailer last year acquired SRS — which serves roofing, landscaping and pool contractors — for about $18.25 billion. At the time, Home Depot said the acquisition expanded its total addressable market by $50 billion to about $1 trillion. "The Home Depot acquired SRS as a platform for growth, and SRS continues to demonstrate exceptional execution and strong performance," Home Depot CEO Ted Decker said in a statement. "In our first year of working together, we've captured significant synergies, including cross-selling new products and service offerings to both Home Depot and SRS customers, advancing Home Depot's enterprise trade credit program through the SRS platform, and many other initiatives designed to drive the customer value proposition and operational efficiency. This success gives us confidence that the addition of GMS to the SRS platform will allow us to create even greater value for our customers." Home Depot and rival Lowe's have been working to win over the pro customer segment in recent years. Earlier this year, Home Depot appointed long-time company veteran Michael Rowe as its executive vice president of pro, tasked with growing the retailer's pro business. To better serve those customers, Home Depot also opened four distribution centers stocked with big and bulky products, including lumber, insulation and roofing shingles. Its agreement for SRS to acquire GMS, however, comes at a time when home improvement retailers feel the pressures of a slowing housing market. During the first quarter of this year, home sales declined 3.1% year over year, according to research from GlobalData. For Home Depot, the retailer reported Q1 net sales grew 9.4% year over year to $39.9 billion, while comparable sales fell 0.3%. Billy Bastek, executive vice president of merchandising, said on a call in May that pro comp sales were positive during the quarter and outpaced DIY customer sales. Recommended Reading Beyond Inc. acquires Zulily brand for $4.5M Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
15 hours ago
- Business
- Yahoo
Home Depot to buy building products firm GMS for $5.5bn
US home improvement retailer The Home Depot has agreed to purchase building products distributor GMS for $5.5bn including net debt, expanding its offerings to professional contractors. GMS has more than 300 construction supply locations across North America. It will be integrated into Home Depot's speciality trade distribution subsidiary SRS Distribution. The strategic move is part of The Home Depot's growth strategy and aims to support contractors' in projects ranging from large-scale constructions to smaller renovations. In 2024, The Home Depot's acquisition of SRS marked its entry into speciality trade distribution, covering sectors such as roofing, landscaping and pool supplies. The addition of GMS is set to further SRS's goal to become a top multi-category building materials distributor. GMS's expertise in distributing products such as drywall, ceilings and steel framing will complement SRS's existing operations and extend its distribution network across the US and Canada. The leadership of GMS, including John C Turner and his senior team, will continue to manage the company under the SRS umbrella. SRS CEO Dan Tinker stated: "The combination of GMS and SRS will provide the residential and commercial pro customer with more fulfilment and service options than ever before. Together, we'll create a network of more than 1,200 locations and a fleet of more than 8,000 trucks capable of making tens of thousands of jobsite deliveries per day.' SRS will initiate a cash tender offer to acquire all GMS common stock for $110 per share, valuing the equity at $4.3bn. The transaction will be financed through existing cash and debt but is not expected to impact The Home Depot's target of a two times leverage ratio by the end of fiscal 2026. The acquisition is projected to increase adjusted earnings per share in the first year post-closing, not including synergies. GMS chair John Gavin stated: 'Following careful consideration of The Home Depot's proposal, along with other potential opportunities for the company, our board determined that this transaction is in the best interests of GMS and all of our shareholders. 'Not only does this outcome deliver significant and certain value to our shareholders, but it also has the added benefit of bringing GMS together with The Home Depot and SRS, where we are confident our employees will flourish, our customers and suppliers will benefit from our increased offerings and resources, and we will honour the legacy of our founders who made all of this possible.' BofA Securities and JP Morgan Securities acted as financial advisors for this transaction, while Weil, Gotshal & Manges provided legal counsel to The Home Depot. "Home Depot to buy building products firm GMS for $5.5bn" was originally created and published by Retail Insight Network, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
Miami Herald
a day ago
- Business
- Miami Herald
Home Depot spends billions on major acquisition
Although home renovation shows and do-it-yourself projects might not be for everyone, those who grew up with handy fathers have a nostalgic connection to this niche world. When running errands with our dads to look for home renovation materials, one retail chain stands out in most people's minds. Don't miss the move: Subscribe to TheStreet's free daily newsletter Upon entering the store's automatic doors, the orange logo plastered all over the walls and the smell of lumber are instantly recognizable. Related: Walmart makes deal to open popular food chain in stores Home Depot is the world's largest home improvement retailer with over 2,300 locations across the U.S., Canada, and Mexico. This retail chain sells more than 35,000 products in-store and 1 million online, ranging from lawn supplies to home improvement materials. Image source: Morris/Bloomberg via Getty Images Home Depot (HD) announced that it has entered a definitive agreement with specialty building products distributor GMS to acquire it for approximately $4.3 billion. As stipulated in the deal, Home Depot's subsidiary SRS Distribution will purchase all outstanding shares of GMS common stock for $110.00 per share, for a total enterprise value including net debt of around $5.5 billion. More Retail News: Beloved Halloween-themed restaurant faces troublesome closureMajor bankrupt home retailer closing 26 stores, list revealedAfter bankruptcy, closed clothing chain hints at comeback Home Depot acquired SRS Distribution, the Texas-based building products distributor, last year for $18.25 billion, marking its largest acquisition ever. This big win comes after major building products provider QXO had submitted a $5 billion cash bid for GMS. The transaction in Home Depot's latest acquisition is expected to be completed by the end of January 2026. This latest acquisition aims to boost Home Depot's sales by attracting home professionals and contractors willing to spend more than a few bucks on light bulbs. With the company's business coming mainly from U.S. shoppers, it has diversified its products' sourcing so it doesn't heavily rely on foreign imports, aiming for no more than 10% coming from a single country amid looming tariffs. Additionally, high interest rates and economic uncertainty have slowed the housing market, decreasing homeowners' demand for Home Depot's main products, since they are not investing to the extent of home professionals. Related: Bankrupt retail chain makes major comeback, reopens new stores Although Home Depot missed analysts' predicted Earnings Per Share during the first quarter of 2025, the company still reaffirmed its fiscal 2025 guidance, expecting total sales to grow 2.8%. GMS joining Home Depot will allow it to offer more fulfillment and service options, attracting a more constant and lucrative market amid so much economic uncertainty. "Together, we'll create a network of more than 1,200 locations and a fleet of more than 8,000 trucks capable of making tens of thousands of jobsite deliveries per day," said SRS Distribution CEO Dan Tinker in the announcement. Related: Veteran fund manager unveils eye-popping S&P 500 forecast The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Bloomberg
a day ago
- Business
- Bloomberg
Home Depot to Buy GMS for $4.3 Billion
Home Depot Inc. has agreed to acquire GMS Inc. for $4.3 billion, expanding its reach to professional contractors. The deal values GMS at $110 per share, a 13% premium to its closing price on Friday, and will broaden SRS Distribution's footprint in exterior materials across the US and Canada. Drew Reading, Bloomberg Intelligence Homebuilder Analyst, joins Bloomberg Intelligence to report on Home Depot's recent purchase of GMS. (Source: Bloomberg)
CTV News
a day ago
- Business
- CTV News
Home Depot targets contractors, rivals with U$4.3 billion deal for GMS
Home Depot said Monday unit SRS Distribution has agreed to acquire specialty building products distributor GMS for about $4.3 billion, stepping up its efforts to capture more demand from professional contractors. The deal also comes amid threats of a hostile takeover for GMS takeover for GMS from billionaire Brad Jacobs-led rival QXO. Home improvement retailers have been sprucing up their professional building materials portfolio to cater to contractors as homeowners pare back on spending big money on large-scale renovation projects. SRS has offered $110 per GMS share held, representing a premium of nearly 36 per cent to the stock's close on June 18, before the QXO bid was made public. Shares of GMS jumped 11.8 per cent to $108.83 in early trading. QXO made a $95.20 per share offer, or about $5 billion in cash, and said it was prepared for a hostile takeover if GMS' management did not accept the proposal by June 24. Including debt, the deal is valued at $5.5 billion, Home Depot said. QXO declined to comment about the takeover proposal on Monday. GMS declined to comment beyond Monday's statement to a Reuters query. The company's chairman said GMS reached a deal with Home Depot after considering all 'other potential opportunities.' The combined business will bolster SRS' distribution footprint across the U.S. and Canada, with a network of more than 1,200 locations and a fleet of more than 8,000 trucks, according to the statement. 'We like this deal from a strategic standpoint as it fits in with HD's growth plans within the 'complex pro' business,' said D.A. Davidson analyst Michael Baker. A higher bid from QXO was unlikely, he said. Home Depot's deal for GMS follows its $18.25 billion purchase of SRS last year, which company executives during its latest quarterly results said was performing above expectations. Smaller rival Lowe's LOW.N acquired Artisan Design for $1.33 billion in April while QXO in March clinched an $11 billion deal for Beacon Roofing Supply as consolidation gathers pace in the industry. The GMS transaction is expected to close by the end of fiscal 2025, and will be funded through cash on hand and debt. BofA Securities and J.P. Morgan Securities are the financial advisers to Home Depot on the deal. (Reporting by Savyata Mishra in Bengaluru, additional reporting by Anshuman Tripathy and Juveria Tabassum; Editing by Sriraj Kalluvila)
