Home Depot reunites with HD Supply

HD Supply is an MRO leader.

In an $8 billion deal, HD Supply is coming back to The Home Depot.

The world's largest home improvement retailer is buying HD Supply Holdings, Inc., the national distributor of maintenance, repair and operations (MRO) products in the multifamily and hospitality end markets.

HD Supply’s connection to The Home Depot goes well beyond the “H.D.” initials. It’s been 13 years since Home Depot, under then CEO Frank Blake, sold HD Supply to a group of private equity firms. The current CEO of HD Supply is Joe DeAngelo, who served as executive vice president and COO of the Home Depot from January through August of 2007.

The news comes shortly after Home Depot’s home-center rival Lowe’s denied reports that it was in talks to acquire HD Supply.

The news also follows an announcement earlier this year of the sale of HD Supply's heavy duty White Cap concrete and construction division for $2.9 billion.

Under the terms of the agreement announced Monday, The Home Depot, will pay about $8 billion. A wholly-owned subsidiary will tender $56 per share in cash to acquire all of the outstanding shares of HD Supply common stock.

For The Home Depot, the move bolsters its position in the MRO marketplace.

"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," said Craig Menear, chairman and CEO of The Home Depot. "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 U.S. and Canada."

The deal is expected to be completed in the retailer’s fourth quarter.

"We're thrilled that our associates are joining the Home Depot team and that our customers will be able to benefit from a broader product assortment, expanded delivery options and enhanced services nationally," said HD Supply’s DeAngelo. "We are confident that this will position both The Home Depot and HD Supply for continued growth and success in the MRO distribution space."