Home Depot Wants to Dominate Building Supply Business With $5B Buyout Of GMS

Home Depot is buying specialty building products distributor GMS for $4.3 billion, the second notable acquisition in a little over a year that emphasizes a deliberate push by the home improvement chain into the building and materials supply business, Michelle Chapman reported for the Associated Press (AP).

The deal is worth about $5.5 billion, including debt. I Photo: Harrison Keely Wikimedia Commons

The acquisitions come as booming sales from the pandemic fade and Home Depot intensifies its focus on professional builders. GMS Inc. of Tucker, Georgia, is a distributor of specialty building products like drywall, steel framing, and other supplies used in both residential and commercial projects.

A subsidiary of Home Depot’s SRS Distribution Inc.—the supply company it bought last year—will start a cash tender offer to buy all outstanding shares of GMS for $110 per share.

The total equity value of the transaction is approximately $4.3 billion. The deal is worth about $5.5 billion, including debt.

Home Depot purchased SRS Distribution, a materials provider for professionals, for more than $18 billion including debt. SRS provides materials for professionals like roofers, landscapers, and pool contractors.

“The combination of GMS and SRS will provide the residential and commercial Pro customer with more fulfillment and service options than ever before,” SRS CEO Dan Tinker said in a statement.

“Together, we’ll create a network of more than 1,200 locations and a fleet of more than 8,000 trucks capable of making tens of thousands of jobsite deliveries per day.”