Home Depot (NYSE:HD) subsidiary has agreed to acquire residential specialty trade distribution company, SRS Distribution, in a deal valued at around $18.25B, including net debt.
Subject to customary closing conditions, including regulatory approvals, the transaction is expected to be funded through cash on hand and debt and is expected to close by the end of fiscal 2024.
Home Depot (HD) expects the transaction to be dilutive to earnings-per-share from a GAAP perspective due to amortization expense, but accretive from a cash EPS perspective in the first year, post-closing, excluding synergies.
Based in McKinney, Texas, SRS is a building products distributor, serving professionals in the landscaping, pool and roofing businesses. The company employs around 11,000 people and operates 760 branches across 47 states. It also has a fleet of 4,000 delivery trucks and a dedicated salesforce that caters to the home pros.
The acquisition will accelerate Home Depot’s (HD) growth with the residential professional customer, while also establishing it as a major specialty trade distributor across multiple verticals.
In addition, with this acquisition, Home Depot (HD) believes its total addressable market to reach approximately $1 trillion, an increase of around $50 billion.