Home Depot to Acquire GMS for $4.3 Billion to Boost Building Supply Business
Home Depot is set to acquire GMS for $4.3 billion, enhancing its offerings in the building supply sector, with the deal expected to close by fiscal 2025.
Overview
- Home Depot is acquiring GMS, a specialty building products distributor, for approximately $4.3 billion to strengthen its position in the building supply market.
- The acquisition follows Home Depot's previous purchase of SRS Distribution for over $18 billion, indicating a strategic focus on serving home professionals.
- GMS shares rose over 11% following the announcement of the acquisition, reflecting investor confidence in the deal.
- The acquisition will be executed through a cash tender offer at $110 per share, with the total deal value reaching about $5.5 billion including debt.
- The transaction is anticipated to close by the end of fiscal 2025, marking a significant expansion for Home Depot in the construction-related products sector.
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Analysis
Center-leaning sources present the Home Depot-GMS acquisition with a focus on financial implications and market reactions. They emphasize the strategic pursuit of home professionals, reflecting a positive outlook on growth. However, the slight share fluctuations suggest cautious investor sentiment, indicating a balanced perspective on the deal's potential impact.
Home Depot shares remained relatively stable, with a slight decrease of less than 1% in early trading on Monday.
GMS shares surged by over 11% in premarket trading.
SRS Distribution, a subsidiary of Home Depot, will acquire all outstanding shares of GMS for $110 per share through a cash tender offer.
Home Depot is purchasing GMS for $4.3 billion.
Home Depot acquired SRS Distribution for $18.25 billion, making it a significant investment in the materials provider for professionals.
Articles (3)
Center (2)
"…Home Depot said it expects the acquisition to be completed by early 2026."
NBC News·14d·"…The transaction will help strengthen Home Depot’s relationship with professional contractors."
ABC News·14d·FAQ
The acquisition of GMS strengthens Home Depot's position in the building supply market by expanding its offerings to professional contractors and enhancing its specialty building products distribution capabilities, complementing its previous purchase of SRS Distribution.
Home Depot will acquire GMS through a cash tender offer at $110 per share, valuing the equity at approximately $4.3 billion. Including debt, the total deal value is about $5.5 billion. The transaction is expected to close by the end of fiscal 2025 or by February 2026.
GMS distributes specialty building products such as drywall, ceilings, and steel framing, which complements SRS Distribution's materials for roofing, landscaping, and pools. The combination broadens Home Depot's U.S. and Canadian distribution footprint and enhances service options for residential and commercial professional customers.
Following the acquisition announcement, GMS shares rose over 11% in premarket trading, reflecting investor confidence, while Home Depot shares slipped less than 1%.
The merger will create a combined network of more than 1,200 locations and over 8,000 trucks, enabling tens of thousands of jobsite deliveries daily, thus offering professional customers more fulfillment and service options than ever before.
History
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