Home Depot is set to acquire specialty building products distributor GMS for $4.3 billion, marking its second significant purchase in just over a year as the home improvement giant focuses on expanding its presence in building and materials supply. This move comes as pandemic-driven sales slow down and Home Depot targets professional builders more aggressively.
GMS Inc., based in Tucker, Georgia, distributes specialty building materials such as drywall, steel framing, and other supplies for both residential and commercial construction projects.
A subsidiary of Home Depot’s SRS Distribution, which was acquired last year, will launch a cash tender offer to buy all outstanding shares of GMS at $110 per share. The deal values GMS at about $4.3 billion in equity and approximately $5.5 billion including debt.
Home Depot previously bought SRS Distribution, a supplier for contractors like roofers, landscapers, and pool builders, for over $18 billion including debt.
Dan Tinker, CEO of SRS, said the merger of GMS and SRS will offer professional customers in both residential and commercial sectors enhanced service and delivery options. Together, the combined network will cover more than 1,200 locations and operate a fleet of over 8,000 trucks, capable of thousands of jobsite deliveries daily.
The acquisition bid by Home Depot came swiftly, just days after QXO made a $5 billion offer for GMS. QXO, led by billionaire Brad Jacobs, focuses on acquiring companies in the building supply industry and recently completed an $11 billion acquisition of Beacon Roofing Supply.
The transaction between Home Depot and GMS is expected to finalize by the end of fiscal 2025. Following the announcement, GMS shares rose nearly 12% at market open, while Home Depot shares saw a slight decline.
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