Home Depot says HD Supply sale has been finalized
Home Depot announced late Thursday that it has finalized the sale of its HD Supply unit to a group of investors.
Home Depot has confirmed that it will sell HD Supply for $8.5 billion, $1.8 billion less than the original terms with three private equity firms. The company expects to net approximately $7.9 billion in cash proceeds from the sale.
The company noted its modified “Dutch auction” tender offer, to purchase up to 250 million shares at a price range of $37 to $42 per share, will expire at 5 p.m. on Aug. 31. The company said it “remains committed to its $22.5 billion recapitalization plan.”
Home Depot will guarantee $1 billion of the debt and retain a 12.5 percent stake in the division. The company is expected to still move forward with its $22.5 billion share repurchasing plan.
This past June, Home Depot announced its intention to sell its HD Supply to Bain Capital, Carlyle Group and Clayton, Dubilier & Rice for $10.3 billion. But in the span of two short months, a credit crisis developed on Wall Street, making investment banks more cautious and putting the squeeze on corporate buyouts.
CEO of California tool company dies
Walter Kopala Jr., president and CEO of Thorsen Tool, died after a long battle with cancer, according to a statement released by the Ontario, Calif.-based company.
In its statement, the company said Kopala “will be succeeded by his friend and associate Randall L. Wright,” who currently serves as COO and interim CEO.
Thorsen Tool manufactures hand tools and is a corporate affiliate of Amarillo Hardware, based in Amarillo, Texas.
Williams-Sonoma earnings down 27 percent
Williams-Sonoma saw net revenue increase 4.1 percent in the second quarter to $859.4 million from $825.5 million in last year’s second quarter.
Second-quarter earnings fell 27 percent after the company made major price reductions on products at Pottery Barn stores. Earnings were $26 million in the second quarter, compared with $35.6 million last year.
Pottery Barn saw comparable-store sales rise 1.8 percent in the second quarter. The high-end home decor chain had sputtered in recent quarters, including in last year’s second quarter when comparable-store sales fell 0.2 percent.
“What was particularly encouraging about these results was the strong performance of our emerging brands and the improving trend we saw in Pottery Barn, which we believe was driven by early successes in the rollout of our Pottery Barn revitalization initiatives,” said Howard Lester, chairman and CEO of Williams-Sonoma. Lester said the second-quarter results were “better than expected.”
In its other retail concepts, comp-store sales rose 1.1 percent at kitchen products retailer Williams-Sonoma and 9 percent at the company’s outlet stores. Comp-store sales fell 3.8 percent at Pottery Barn Kids stores.
Williams-Sonoma’s strong catalog and e-commerce sectors showed further growth, with a 2.8 percent increase in direct-to-customer net revenue, to $372.4 million from $362.2 million last year. Internet revenue increased 11.1 percent to $237.4 million compared with $213.8 million last year.
Williams-Sonoma operates 580 stores under the banners Williams-Sonoma, Pottery Barn, West Elm, Pottery Barn Kids, PBteen, West Elm and Williams-Sonoma Home. The company also has seven mail order catalogs and six e-commerce Web sites.