The second significant acquisition in just over a year, Home Depot’s $4.3 billion purchase of specialty construction supplies distributor GMS, highlights the home improvement chain’s purposeful foray into the building and materials supply industry.
The purchases come as Home Depot sharpens its focus on professional builders in response to the pandemic’s surge in sales.
The Tucker, Georgia-based GMS Inc. distributes specialty building materials used in both residential and commercial projects, such as steel frame and drywall.
All existing shares of GMS will be purchased for $110 each through a cash tender offer by a subsidiary of SRS Distribution Inc., the supply firm that Home Depot purchased last year. The transaction’s total stock value is roughly $4.3 billion. With debt included, the acquisition is valued at roughly $5.5 billion.
Professional supplies company SRS Distribution was acquired by Home Depot for about $18 billion, including debt. SRS offers supplies for experts such as pool contractors, landscapers, and roofers.
According to a statement from SRS CEO Dan Tinker, the integration of GMS and SRS will give the residential and business Pro client additional fulfillment and service alternatives than in the past. Together, we’ll build a fleet of over 8,000 trucks and a network of over 1,200 locations that can deliver to tens of thousands of job sites every day.
According to a regulatory filing, Atlanta-based Home Depot acted swiftly to purchase GMS, placing its own bid less than two weeks after QXO made a $5 billion offer. The CEO of QXO, which was founded to acquire businesses in the building supply industry, is billionaire Brad Jacobs. QXO finished purchasing Beacon Roofing Supply for almost $11 billion in April.
By the end of fiscal 2025, the GMS deal with Home Depot should be finalized. At opening bell, GMS shares surged by about 12%. Shares of Home Depot went down a little.