Home Depot to Buy Former Unit HD Supply for $8.7 Billion
16 Novembre 2020 - 6:06PM
Dow Jones News
By Colin Kellaher
Home Depot Inc. agreed to buy HD Supply Holdings Inc. for about
$8.7 billion, beefing up its ability to distribute industrial
products amid the pandemic and reuniting with a unit it sold off in
2007.
HD Supply is a wholesale distributor of electrical, plumbing,
janitorial and other supplies. It has about 44 distribution centers
in the U.S. and Canada. It booked sales of nearly $6 billion in its
latest fiscal year, though it recently sold off a construction unit
that accounted for about half its business.
Home Depot, which has gotten a big lift in sales from rising
interest in household projects amid the coronavirus pandemic, said
it expects the acquisition of HD Supply will accelerate its sales
growth and add to earnings starting next fiscal year.
The company in August reported its strongest quarterly sales
growth in nearly 20 years and is expected to report another strong
gain on Tuesday. The pandemic has fueled do-it-yourself projects
and strained supply chains. CEO Craig Menear had sought to build up
the company's professional business before coronavirus.
The Atlanta home-improvement giant said it will pay $56 a share
in cash for HD Supply, a 25% premium to Friday's closing price of
$44.81. Based on roughly 155.6 million shares outstanding, Home
Depot is paying about $8.7 billion.
Home Depot said it will fund the acquisition, which it expects
to complete by the end of January, with cash on hand and debt. The
transaction has a total enterprise value of roughly $8 billion,
including HD Supply's net cash, Home Depot said.
Home Depot built HD Supply in the 2000s through an acquisition
spree led by Robert Nardelli, a former chief executive. After a CEO
change, the company sold the unit in 2007 to Bain Capital, Carlyle
Group and Clayton Dubilier Rice in a leveraged buyout worth $8.4
billion.
The trio of private-equity firms took HD Supply public in
2013.
It competes with Fastenal Co., W.W. Grainger Inc. and Home
Depot's own Pro division.
HD Supply last year said it planned to separate its
facilities-maintenance and its construction and industrial
businesses into two publicly traded companies, but it put those
plans on hold in March amid chaotic market conditions brought on by
the pandemic.
HD Supply in August opted to sell the construction and
industrial business, known as White Cap, to Clayton Dubilier for
$2.9 billion in cash and to focus on the facilities-maintenance
business. That deal closed last month.
Shares of HD Supply jumped 24.2% to $55.77 in early trading
Monday. Home Depot shares edged up less than 1%.
Write to Colin Kellaher at colin.kellaher@wsj.com
(END) Dow Jones Newswires
November 16, 2020 11:51 ET (16:51 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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