The deal will expand Home Depot's total potential market by about $50 billion to roughly $1 trillion, the company said. Home Depot has a market value of $382.42 billion.
Home Depot will buy building materials supplier SRS Distribution in an $18.25 billion deal, in the top U.S. home improvement chain's largest deal as it looks to broaden its professional customer base to better tackle tepid demand. The company and rival Lowe's Cos. have projected a slower recovery this year as U.S. consumers pause big home remodeling and renovation projects due to sticky inflation.
Leonard Green had bought a majority stake in SRS in a $3.55 billion deal in 2018, a person familiar with the matter told Reuters on Thursday. Last December, Leonard Green allowed some of its fund investors to cash out of SRS at a valuation of about $16 billion, including debt, the source said, adding Home Depot agreed to the deal following a sale process for the company. "This is a great deal at a great time," said Thomas Hayes, chairman at Great Hill Capital.
Shares of Home Depot, which has a market value of $382.42 billion according to LSEG data, were flat in early trading. The acquisition will add SRS' network of more than 2,500 professional sales force in 760 plus locations to Home Depot's footprint of more than 2,000 U.S. stores and distribution centers.
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