Home Depot announced it will acquire SRS Distribution, which sells supplies to builders, roofers, landscapers and pool contractors, in a massive $18.25 billion deal that includes assumed debt.
Home Depot said in an article: press release announced Thursday that it expects the transaction to close during the 2024 fiscal year, which ends at the end of January 2025.
The move is the home improvement retailer’s latest and biggest deal to win more business from major contractors and construction companies. CNBC Previously reported.
The Atlanta-based chain, which has more than 2,000 locations across the U.S., also revealed last week that it would open four new distribution centers in Detroit, Los Angeles, San Antonio and Toronto during the first half of this year to boost sales. This is a request from a housing specialist who handles large-scale projects such as major renovations.
According to CNBC, each facility averages about 500,000 square feet, which is about five times the size of the average Home Depot store.
Home Depot chief Ted Decker told CNBC that the SRS acquisition is a “complementary boost” to the company’s efforts to attract more contractors, roofers and other home professionals. said.
He added that the deal is the largest of its kind in Home Depot’s 46-year history and increases the company’s total addressable market by $50 billion, CNBC reported. .
“Increasing our share with professionals will fuel Home Depot’s next big chapter of growth. and new customers,” a Home Depot spokesperson told the Post.
Texas-based SRS is owned by private equity firms Leonard Green & Partners and Berkshire Partners and operates 760 branches and about 4,000 delivery trucks in 47 states.
SRS also has about 11,000 employees, but it was not immediately clear whether there would be any layoffs as a result of the acquisition.
Representatives for SRS did not immediately respond to The Post’s request for comment.
Separately on Thursday, SRS said in a news release on its website that “senior management will remain with the company to guide its ambitious growth plans.”
Under the new structure with Home Depot, which employs about 465,000 people, SRS President and CEO Dan Tinker will report directly to Home Depot boss Ted Decker. becomes.
Decker told CNBC he was confident the deal would be approved by federal regulators, despite recent scrutiny surrounding large mergers and acquisitions.
“We feel this is a good thing to happen because each customer base, each channel, each buying opportunity is different,” he said.
Still, the acquisition comes as Home Depot expects sales to slow.
After reporting earnings last month that beat Wall Street expectations, the home improvement giant expects total sales to rise only about 1% this year, even though fiscal 2024 includes an extra week. He said that
According to CNBC, Home Depot’s sales for the three months ended Jan. 28 were $34.79 billion, beating estimates of $34.64 billion, but analysts only expected 1% of total sales. This was lower than the expected 1.6% increase.
