The Home Depot subsidiary agreed to buy SRS Distribution, a residential specialty trade distribution company, for approximately $18.25 billion (including net debt).
The Zhitong Finance App learned that the Home Depot (HD.US) subsidiary agreed to acquire SRS Distribution, a professional residential trade distribution company, at a price of approximately US$18.25 billion (including net debt).
The deal is expected to be carried out in accordance with normal closing conditions, including approval from relevant regulators. Funding will be raised through existing cash and debt financing and is expected to be completed by the end of the 2024 fiscal year.
Home Depot expects that from a GAAP perspective, the deal will have a diluting effect on earnings per share due to amortization expenses, but from the perspective of cash earnings per share for the first year after completion of the transaction, excluding the synergy effect, the deal will increase earnings per share.
According to information, SRS, headquartered in McKinney, Texas, is a construction products distributor serving professionals in the gardening, pool, and roofing business. The company operates 760 branches in 47 states and has more than 2,500 sales professionals and 4,000 delivery trucks.
The acquisition will accelerate Home Depot's growth in residential specialty customers while also making it a major specialty trade distributor in multiple verticals.
It is worth mentioning that through this acquisition, Home Depot expects its total addressable market to reach about 1 trillion US dollars, an increase of about 50 billion US dollars.
By Wednesday's close, Home Depot closed up 1.57% to $385.89. The stock is up about 12% so far this year, compared with the S&P 500 up 10.66%.