Home Depot to acquire building products supplier for $18.25B - The Entrepreneurial Way with A.I.

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Thursday, March 28, 2024

Home Depot to acquire building products supplier for $18.25B

#SmallBusiness

Dive Brief:

  • The Home Depot plans to buy building materials supplier SRS Distribution for about $18.25 billion. The retailer said Thursday that the move will enable the company to boost its business with professional customers as do-it-yourselfers continue deferring big-ticket home improvement purchases and projects due to inflation.
  • Under the terms of the deal, which is subject to regulatory approval, a Home Depot subsidiary will acquire SRS, which serves professional roofing, landscaping and pool contractors. The SRS senior leadership team, including CEO Dan Tinker, will continue leading the company. Home Depot said it would fund the acquisition through cash on hand and debt. The deal is expected to close at the end of FY 2024.
  • Home Depot previously said it is focused on capturing more spending from pro customers. With SRS’s acquisition, the home improvement retailer said its total addressable market grew by $50 billion to about $1 trillion. The retailer holds about 17% of the market share.

Dive Insight:

Although professional customers made up just 10% of The Home Depot’s customer base, they represented half of the company’s sales at the start of last year, the company said. Home Depot CEO Ted Decker said SRS’s branch network combined with the home improvement retailer's over 2,000 U.S. stores, distribution centers and product offerings will provide residential pro customers with more fulfillment and service options.

“SRS is an industry leader with a proven track record of profitable growth across verticals,” Decker said. “SRS’s ability to build leadership positions in each of its trade verticals while generating significant revenue growth is a testament to its strong vision, leadership, culture and execution.”

Founded in 2008, Texas-based SRS said it has a sales force of over 2,500 people, 760 branches in 47 states operating under local brands and job site delivery capabilities supported by a fleet of 4,000 trucks. The company generated about $10 billion in revenue in 2023.

“We are looking forward to combining our differentiated assets and capabilities, including our extensive branch network, experienced sales team, robust trade credit offering, and order management system, geared at serving the complex project purchase occasion, with The Home Depot’s competitive advantages,” Tinker said in a statement.

Home Depot said this month it plans to open new distribution centers in Detroit, Los Angeles, San Antonio and Toronto. The new facilities will stock bulky items like lumber, insulation and roofing shingles and are meant to improve service and inventory for pro customers.





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Nate Delesline III, Khareem Sudlow