Home Depot To Acquire SRS Distribution
Big news today in the overlapping worlds of retail home improvement and distribution of building products that will impact home service providers across multiple verticals like landscape, pool and roofing contractors.Â
Today, The Home Depot, the world’s largest home improvement retailer, announced that the company has entered into a definitive agreement to acquire SRS Distribution Inc. (“SRS”), a private company and one of the fastest-growing distributors of building products here in the United States.Â
According to The Home Depot’s official press release, the SRS acquisition will allow the Atlanta-based home improvement giant to accomplish two important objectives:Â
- Enable the company to better serve complex project purchase occasions with renovators and remodelers, and…Â
- Establish The Home Depot as a leading specialty trade distributor across several key verticals serving professional roofer, landscaper and pool contractors nationwide.Â
Seeking Closer Ties With Residential Specialty Trade Pros
While better assisting renovators and remodelers with complex project purchases is one goal of the transaction, the SRS acquisition probably has the most upside potential in giving The Home Depot better visibility with and access to residential specialty trade professionals.Â
SRS President and CEO Ted Decker emphasized this advantage in today’s official press release announcing the merger agreement:Â
“SRS’s branch network, coupled with The Home Depot’s 2,000+ U.S. stores and distribution centers, comprehensive product offering, and extensive pro brands, provides the residential pro customer with more fulfillment and service options than ever before.
In acquiring SRS, The Home Depot will gain a tremendous pool of human capital and physical assets including a sales force of over 2,500 professionals, 760 branch locations across 47 states, and a fleet of over 4,000 trucks with jobsite delivery capabilities.Â
The SRS network and reach with millions of residential specialty pros nationwide is even more impressive considering thatthe company has only been around since 2008 making it 30 years younger than The Home Depot that was founded in Marietta in 1978.Â
SRS Deal Valuation And The Home Depot Share Price
According to the official press release, a subsidiary of The Home Depot will acquire SRS for a total enterprise value (including net debt) of approximately $18.25 billion.Â
That figure puts the SRS valuation over twice the $8 billionThe Home Depot paid in 2020 to acquire HD Supply, one of the largest wholesale distributors in North America with 44 distribution centers in the U.S. and Canada.Â
Shares of The Home Depot only dipped slightly after the official announcement and closed the day just under $384 per share. The company’s stock is up 11% year to date and 100% over the past five years when shares of The Home Depot traded at $191 in March 2019.
Contact CII Today
If you own an established residential specialty trade business and would like to get a better understanding of the current market value of your company and important steps you can take today to maximize that value, get in touch with a CII business advisor today.