Atlanta, Georgia – Home Depot, a leading home improvement retailer, announced its record-breaking acquisition of SRS Distribution, a provider of materials for professionals, in a monumental deal valued at around $18.25 billion. This strategic move marks Home Depot’s largest acquisition to date, propelling the company further into the competitive professional builder and contractor market.
SRS Distribution specializes in supplying materials to professionals such as roofers, landscapers, and pool contractors. With the housing market facing a scarcity of new homes, leading to soaring prices, Home Depot is banking on this acquisition to capitalize on the growing demand for construction materials. The median sales price for new homes in the U.S. has surged by 29.4% over the past five years, reaching a staggering $417,700 in the fourth quarter, as reported by the Federal Reserve Bank of St. Louis.
The U.S. housing market has recently rebounded from a prolonged sales slump brought about by a combination of limited housing inventory and a sharp increase in mortgage rates. While the decline in rates since last fall has opened up opportunities for some prospective homebuyers, millions of Americans still find homeownership financially out of reach, fueling a burgeoning market for home improvement and maintenance services.
Home Depot’s CEO, Ted Decker, expressed optimism about the deal, stating that the acquisition of SRS not only expands the company’s reach in the residential professional customer segment but also presents new opportunities in the specialty trade sector. SRS boasts a robust sales team of over 2,500 employees, operating across 47 states with more than 760 branches, a 4,000-plus truck fleet, and efficient jobsite delivery capabilities.
Both companies are poised to leverage their respective strengths and assets to better serve professionals and drive growth in a competitive and fragmented market. SRS CEO Dan Tinker emphasized the synergies between the two companies’ offerings, highlighting the potential to enhance customer service and capture a larger market share. Tinker and his management team will continue to oversee operations at SRS, headquartered in McKinney, Texas.
The deal between Home Depot and SRS Distribution is projected to be finalized by the end of fiscal 2024, marking a significant milestone for both companies as they aim to solidify their positions in the ever-evolving home improvement and construction industry. Subscribe to the CFO Daily newsletter for the latest insights on corporate finance trends and key executive developments. Sign up now for free to stay ahead of the curve.