Home Depot Announces $18.25B Acquisition

Home Depot has announced the largest acquisition in its history. The company will buy SRS Distribution, a materials provider for professionals, in a deal valued at approximately $18.25 billion, the AP reports. With the deal, Home Depot steps more aggressively into the fast growing professional builder and contractor business. SRS provides materials for professionals like roofers, landscapers, and pool contractors. Home Depot has stepped up its focus on "pro customers" amid sagging demand from do-it-yourself customers who have paused major renovation projects because of inflation, reports Reuters.

• Home Depot is making a big bet on a housing market that is suffering a severe lack of new homes, which has driven prices sky high. The median sales price for new homes in the US has climbed 29.4% over the past five years. In the fourth quarter, the median sales prices totaled $417,700, according to data from the Federal Reserve Bank of St. Louis.

• Home Depot estimates the acquisition will expand its potential market by around $50 billion, bringing the total to $1 trillion. "SRS has built a robust and successful platform that will accelerate our growth with the residential professional customer while presenting future opportunities with the specialty trade pro," Home Depot CEO Ted Decker said in a statement.
• SRS has a sales team of more than 2,500 and more than 760 branches across 47 states. It also has a 4,000-plus truck fleet and jobsite delivery capabilities. SRS CEO Dan Tinker and his senior management team will continue to lead SRS, which is based in McKinney, Texas.
• "The closing of the acquisition is subject to customary closing conditions, including regulatory approvals, and is expected to be completed by the end of fiscal 2024," Home Depot said in a news release. "The transaction is expected to be funded through cash on hand and debt."

(More Home Depot stories.)