Home improvement retailer The Home Depot has reached a definitive agreement to acquire US-based specialty trade distributor SRS Distribution.
The acquisition, valued at approximately $18.25bn, is set to significantly expand The Home Depot's reach within the residential professional sector.
Under the merger terms, a subsidiary of The Home Depot will take over SRS, enhancing the retailer's capabilities and market presence.
This strategic move is expected to bolster The Home Depot's service offerings to renovators and remodellers, establishing it as a key player in specialty trade distribution.
SRS Distribution has more than 2,500 professional sales force and over 760 branch networks across 47 states.
The company also boasts more than 4,000 truck fleet and jobsite delivery capabilities.
With SRS’s extensive sales force, branch network, and delivery capabilities,
The Home Depot will better cater to the needs of residential specialty trade professionals.
The acquisition is anticipated to increase The Home Depot's total addressable market to around $1tn.
The Home Depot chair, president, and CEO Ted Decker said: "SRS is an industry leader with a proven track record of profitable growth across verticals.
"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. SRS has built a robust and successful platform that will accelerate our growth with the residential professional customer while presenting future opportunities with the specialty trade pro."
Post-acquisition, SRS president and CEO Dan Tinker, along with his senior leadership team, will continue to steer SRS.
They will collaborate with The Home Depot to enhance the value proposition for professional customers.
The acquisition is subject to standard closing conditions, including regulatory approvals, and is expected to be completed by the end of fiscal 2024.
The Home Depot plans to finance the deal through available cash and debt, aiming to maintain its current credit ratings.
Last month, the home improvement retailer revealed plans to open four new distribution centres in North America in 2024.
