Home Depostore in San Carlos, California, USA, Monday, November 11th, 2024.
David Paul Morris | Bloomberg | Getty Images
Home Depot He said he bought it on Monday GMa building product distributor. For around $4.3 billion, retailers are trying to pull more sales from contractors and other housing professionals.
Home Depot’s shares remained pretty flat in early trading on Monday. GMS stocks jumped over 11%.
As part of the transaction, the Home Depot-owned subsidiary SRS Distribution purchases all outstanding shares of GMS at $110 per share.
Home Depot said the acquisition is expected to be completed by early 2026.
The Home Depot announcement also concludes with a potential bid war between Big-Box retailer and billionaire Brad Jacobs. Jacobs building products distributor QXO has said it will provide about $5 billion in cash to acquire GMS and will advance the hostile takeover if the company’s management rejects the proposal.
As Home Depot chases growth, it chases a more stable, more advantageous portion of its home improvement business. Electricians, roofers, home renovations, and other professionals who work on large projects all year round and need a lot of supplies. Home Depot said it is speeding up along its strategy with GMS trading.
Home Depot purchased its GMS-acquired subsidiary SRS Distribution last year, the largest acquisition in history, for $18.25 billion. Based in Texas, SRS sells supplies to landscaping, roofing and pool business professionals, and as it grows it acquires many other small suppliers.
It takes time for Home Depot to focus on selling to professionals. The rise in mortgage rates have slowed sales as home sales declined and borrowing costs increased, leading to lower demand for homeowners for large-scale homeowners projects.
The company said it expects total sales to increase by 2.8% with sales equivalent to all fiscal years.
