House Depot SRS Distribution buys GMS

House Depot stated Monday that it’s shopping for GMS, a constructing merchandise distributor, for about $4.3 billion because the retailer strikes to attract extra gross sales from contractors and different residence professionals.

Shares of House Depot have been down barely in afternoon buying and selling on Monday. GMS shares have been up greater than 11% and hit a 52-week excessive.

As a part of the deal, the House Depot-owned subsidiary SRS Distribution will buy all excellent shares of GMS for $110 per share, which provides as much as about $4.3 billion and quantities to complete enterprise worth together with web debt of about $5.5 billion, the corporate stated.

House Depot stated it expects the acquisition to be accomplished by early 2026.

House Depot’s announcement additionally concludes a possible bidding warfare between the big-box retailer and billionaire Brad Jacobs. Jacobs’ building-products distributor QXO had supplied about $5 billion in money to amass GMS and stated it will press ahead with a hostile takeover if the corporate’s administration rejected the proposal.

As House Depot chases progress, it is gone after a steadier and extra profitable piece of the house enchancment enterprise: electricians, roofers, residence renovators and different professionals who sort out giant initiatives year-round and wish lots of provides. House Depot stated it is rushing alongside that technique with the GMS deal.

House Depot purchased SRS Distribution — the subsidiary that is buying GMS — final yr for $18.25 billion, in the most important acquisition in its historical past. Texas-based SRS sells provides to professionals within the landscaping, roofing and pool companies and it has purchased up many different smaller suppliers because it’s grown.

House Depot’s give attention to promoting to professionals is nicely timed. Gross sales from do-it-yourself prospects have slowed as increased mortgage charges have decreased housing turnover and dampened householders’ demand for bigger initiatives due to increased borrowing prices.

The corporate stated it expects complete gross sales to develop by 2.8% for the total fiscal yr and comparable gross sales, which take out the impression of one-time components like retailer openings and calendar variations, to rise about 1%.