Proactive Investors - Home Depot Inc (NYSE:HD, ETR:HDI), the DIY retailer, is set to buy SRS Distribution, the building materials supplier, for US$18.25 billion as it looks to ramp up demand by expanding its professional customer base.
This deal represents the largest purchase made by the leading US home improvement company in its history.
Both Home Depot and rival Lowe’s had previously warned about a slower recovery than expected in the US over 2024, as consumers slow or pause remodelling and renovation plans until inflation slows.
Home Depot’s DIY segment, which accounts for nearly half of its business, has therefore been struck by weakened demand, leaving the group upping its focus towards “pro-customers”.
Pro-customers include contractors, handymen and professional builders.
Purchasing SRS Distribution will expand Home Depot’s grip on the pro-customer market by about US$50 billion to US$1 trillion.
SRS is a portfolio company owned by private equity firms Leonard Green & Partners and Berkshire Partners and is focused on selling to the likes of roofers, landscapers and pool contractors.
The company will remain independent from Home Depot’s business and will retain its current leadership team.
Back in 2020, Home Depot purchased maintenance, repair and operations distributor Supply Holdings for around US$8 billion.