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Home Depot Buys Back HD Supply for $8 Billion to Build MRO Business

Nov. 20, 2020
HD Supply focuses on servicing the MRO needs of commercial accounts, hospitals, multi-family property owners, hotels and other hospitality and government accounts.

The Home Depot, Atlanta, announced its plans earlier this week to re-acquire HD Supply Holdings Inc., also of Atlanta, approximately 13 years after selling the company for $8.5 billion to a group of large private-equity firms — Clayton Dubilier & Rice Inc., Bain Capital Partners and Carlyle Group.

Under the terms of the merger agreement, Home Depot will commence a cash tender offer to purchase all outstanding shares of HD Supply common stock for $56 per share, for a total enterprise value (including net cash) of approximately $8 billion. It expects to complete the transaction by Jan. 31, 2021, the end of its fiscal fourth quarter.

HD Supply focuses on servicing the MRO needs of commercial accounts, hospitals, multi-family property owners, hotels and other hospitality and government accounts. Craig Menear, chairman and CEO of The Home Depot, said in the press release, “The MRO customer is highly valued by The Home Depot, and this acquisition will position the company to accelerate sales growth by better serving both existing and new customers in a highly fragmented $55-billion marketplace. HD Supply complements our existing MRO business with a robust product offering and value-added service capabilities, an experienced sales force that enhances the strong team we have in place, as well as an extensive, MRO-specific distribution network throughout the U.S. and Canada.”

Home Depot originally built HD Supply into a large multi-vertical distributor serving the electrical, utility and construction trades. Its Power Solutions business unit, which was built in part with the acquisitions of Hughes Supply in 2007 and several utility specialists, was regarded as the largest utility distributor in the U.S. and reportedly has sales of more than $1 billion. HD Supply Holding sold the business unit in 2015 to Anixter International for $825 million in cash. The deal was Anixter’s largest acquisition.

According to information at www.hdsupply.com, HD Supply stocks 200,000 stock-keeping units (SKUs) at 44 distribution centers across 25 states and two Canadian provinces. Its website says the company has 5,500 employees servicing 300,000 customers. HD Supply was formerly known as Maintenance Warehouse, which was founded in San Diego in 1974 to supply maintenance products to owners and managers of multi-family properties. Home Depot bought Maintenance Warehouse in 1997 and rename it “The Home Depot Supply” in 2004, according to information at www.hdsupply.com.

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