Home improvement retailer The Home Depot has signed definitive agreement to acquire maintenance, repair, and operations (MRO) products distributor HD Supply.
As part of the agreement, a subsidiary of The Home Depot will offer cash tender to acquire all outstanding shares of HD Supply common stock at $56 per share.
The total enterprise value, which includes net cash, is approximately $8bn. The company will finance the deal through cash on hand and debt.
The acquisition of HD Supply is expected to expand The Home Depot position in the MRO marketplace.
The Home Depot chairman and CEO Craig Menear said: “The MRO customer is highly valued by The Home Depot, and this acquisition will position the company to accelerate sales growth by better serving both existing and new customers in a highly fragmented $55 billion marketplace.
“HD Supply complements our existing MRO business with a robust product offering and value-added service capabilities, an experienced salesforce that enhances the strong team we have in place, as well as an extensive, MRO-specific distribution network throughout the US and Canada.”
The completion of the tender offer is subject to customary closing conditions and is expected to be completed during the fourth quarter of The Home Depot’s fiscal year, which ends on 31 January 2021.
Headquartered in Atlanta, HD Supply primarily serves the multifamily and hospitality end markets.
The Home Depot noted that following the merger, its customers will have access to larger product assortment, expanded delivery options, and enhanced services across the country.