Home Depot Purchases SRS Distribution for $18 Billion
Home Depot is a home improvement retailer that caters to the DIYers, but the company wants to focus on construction professionals. In a bid to do so, the retailer recently announced that it is buying roofing distributor SRS Distribution Inc. for a whopping $18.25 billion. The retailer’s goal is to attract more business from general contractors and construction companies.
SRS Distribution sells supplies for professional roofers, landscapers, pool contractors, and other contractors. The purchase is still under regulatory approval but is expected to close by January of next year. Home Depot said it will finance the deal through cash on hand and debt.
SRS Distribution is owned by private equity firms. The company is considered an industry leader with a proven track record of profitable growth. SRS Distribution was founded in 2008 and is based in Texas. The company has 760 locations in 47 states with a fleet of 4,000 delivery trucks. These features will hopefully allow Home Depot to gain more professional customers who work on larger projects. SRS has built a robust and successful platform that will accelerate growth and present future opportunities with the specialty trade.
SRS Distribution has rapidly grown in the last 16 years by buying local and regional distributors. Those acquisitions will continue to operate under their own brands. They will not be owned by Home Depot.
Under the terms of the purchase agreement, SRS Distribution will operate as an independent business within Home Depot. The role of SRS Distribution will be to grow Home Depot’s pro business, which includes contractors working on more difficult projects who need wholesale or specialty supplies. Home Depot hopes to build up its e-commerce sales and attract more professionals while retaining DIY customers.
This acquisition is just one of several recent deals that Home Depot has made in the pro space. This includes the $8 billion acquisition of HD Supply in 2020 as well as two other acquisitions made in 2023 — International Designs Group, which owns Construction Resources, and Temco, an appliance delivery and installation company. Home Depot also plans to open four new distribution centers catering to construction professionals who need supplies delivered to job sites.
Both Home Depot and SRS Distribution are excited about the deal. They believe it will be the optimal strategic outcome for the business and that the resources and capabilities will help them achieve success.
Learn More About Business Purchases
Buying a business can be expensive, but it can be a good way to make money in the long run. It can help a business align with its goals and bring in new customers.
By choosing an Orlando business purchase & sale lawyer B.F. Godfrey from Godfrey Legal, you can be confident that all the details will be accounted for, the risks analyzed, and the challenges potentially mitigated. Call (407) 890-0023 or fill out the online form to schedule a consultation.
Source:
usatoday.com/story/money/2024/03/28/home-depot-srs-distribution/73128544007/
