Home Depot to buy SRS Distribution in $18.25 billion deal

Doug Cunningham
·2 min read
UPI
The Home Depot said Thursday it will buy SRS Distribution in an $18.25 billion deal that includes net debt. Home Depot CEO Ted Decker said the deal will accelerate the company's efforts to attract more professional customers. File Photo courtesy of Tony Bernard/Wikimedia Commons

March 28 (UPI) -- The Home Depot Thursday announced an agreement to buy specialty trade distributor SRS Distribution.

The deal, valued at $18.25 billion, is expected to close by the end of the 2024, pending regulatory approvals.

"SRS is an industry leader with a proven track record of profitable growth across verticals," said Home Depot CEO Ted Decker, in a statement. "SRS's ability to build leadership positions in each of its trade verticals while generating significant revenue growth is a testament to its strong vision, leadership, culture and execution."

Home Depot said the acquisition brings its "total addressable market" to about $1 trillion, an increase of roughly $50 billion.

There are more than 2,000 U.S. Home Depot Stores and distribution centers.

SRS has more than 760 locations across 47 states with a 4,000 truck fleet and about 11,000 employees, including a sales force of more than 2,500.

"Our team is thrilled to join The Home Depot," said SRS CEO Dan Tinker, in a statement. "We are looking forward to combining our differentiated assets and capabilities, including our extensive branch network, experienced sales team, robust trade credit offering, and order management system, geared at serving the complex project purchase occasion, with The Home Depot's competitive advantages. We believe this will enable us to better serve pros and continue growing in our large and highly fragmented market."

The SRS acquisition is a drive by The Home Depot to get more business from contractors and other home-building professionals.

Decker said in an interview with CNBC that the SRS deal is "a complementary accelerator" to The Home Depot's efforts to attract more professional business.

The company's customers are now split between pros and do-it-yourself customers.

The $18.25 billion deal includes net debt.

Home Depot's CFO Richard McPhail said in a statement that the company will "access the debt capital markets to raise incremental indebtedness in support of this acquisition."

He said the company expects that to create significant shareholder value "over the long term."