Home Depot on Monday announced it would buy building products distributor HD Supply Holdings Inc. for $8 billion, according to the company’s press release. The acquisition will help Home Depot to regain control over the industrial material wholesaler after spinning it over a decade ago.
- The acquisition will allow Home Depot to accelerate sales growth by serving existing and new customers in a fragmented $55 billion marketplace-Craig Menear, Home Depot Chairman and CEO.
- HD Supply’s customers will benefit from a broader product assortment, expanded delivery options, and enhanced services-Joe DeAngelo, HD Supply chairman and CEO.
- Home Depot would offer $56 per share in cash to HD Supply shareholders, a nearly 25% premium to the stock’s last close as it seeks to fund the deal through cash and debt.
- The deal is expected to be completed in the fourth fiscal quarter which ends on January 31.
- Home Deports anticipates HD Supply deal to be accretive to its earnings in 2021.
HD Supply shares rose 24.3% on premarket following the acquisition news, and both companies’ stocks are currently gaining. HD: NYSE is up 0.64%, HDS: NASDAQ is up 24.29%