March 31, 2024
The Home Depot, Atlanta, has entered into a definitive agreement to acquire SRS Distribution (SRS), McKinney, Texas, a residential specialty trade distribution company across several verticals serving the professional roofer, landscaper and pool contractor. With the acquisition, The Home Depot said it now believes its total addressable market is approximately $1 trillion, an increase of approximately $50 billion.
Under the terms of the merger agreement, a subsidiary of The Home Depot will acquire SRS for a total enterprise value (including net debt) of approximately $18.25 billion. The closing of the acquisition is subject to customary closing conditions, including regulatory approvals, and is expected to be completed by the end of fiscal 2024. The transaction is expected to be funded through cash on hand and debt.
“We plan to access the debt capital markets to raise incremental indebtedness in support of this acquisition. We expect the acquisition to create significant shareholder value over the long term,” said Richard McPhail, executive vice president and chief financial officer, The Home Depot.
“SRS is an industry leader with a proven track record of profitable growth across verticals,” said Ted Decker, chair, president and CEO, The Home Depot. “SRS’s ability to build leadership positions in each of its trade verticals while generating significant revenue growth is a testament to its strong vision, leadership, culture and execution. SRS has built a robust and successful platform that will accelerate our growth with the residential professional customer while presenting future opportunities with the specialty trade pro.”
Decker continued, “SRS’s branch network, coupled with The Home Depot’s 2,000-plus U.S. stores and distribution centers, comprehensive product offering and extensive pro brands, provides the residential pro customer with more fulfillment and service options than ever before. I look forward to welcoming the entire SRS team to The Home Depot and capturing the exciting opportunity ahead.”
SRS’s 2,500-plus professional sales force and 760-plus branch network across 47 states, together with its 4,000-plus truck fleet and job-site delivery capabilities, will enable The Home Depot to extend its offering to residential specialty trade pros while better serving renovator/remodelers, the company said.
“Our team is thrilled to join The Home Depot,” said Dan Tinker, SRS’s president and CEO. “We are looking forward to combining our differentiated assets and capabilities, including our extensive branch network, experienced sales team, robust trade credit offering, and order management system, geared at serving the complex project purchase occasion, with The Home Depot’s competitive advantages. We believe this will enable us to better serve pros and continue growing in our large and highly fragmented market.”
Tinker, as well as his senior leadership team, will continue to lead SRS.
