Home Depot is buying back maintenance, repair and operations (MRO) products wholesale distributor HD Supply Holdings for $8 billion.
The acquisition comes 13 years after the Atlanta, Georgia-based retailer sold HD Supply Holdings to private equity investors Bain Capital Partners, The Carlyle Group and Clayton, Dubilier & Rice for $10.3 billion.
The company’s move to acquire the MRO wholesale distributor comes at a time when consumers are continuing to spend more on home improvement projects. For example, recent research shows that nearly three-fourths of consumers have taken up home or garden-related projects in Q2 this year, up from 56 percent last year. Such trends are only expected to grow stronger and will continue to drive demand for supplies for home improvement retailers such as Home Depot.
In August this year, Home Depot reported that its Q2 net sales and comparable increased by 23.4 percent, reaching $38 billion. According to Retail Dive, this resulted in the retailers’ net income to rise by 24.5 percent year over year to $4.3 billion.
“The MRO customer is highly valued by The Home Depot, and this acquisition will position the company to accelerate sales growth by better serving both existing and new customers in a highly fragmented $55 billion marketplace,” Home Depot CEO Craig Menear said. “HD Supply complements our existing MRO business with a robust product offering and value-added service capabilities, an experienced salesforce that enhances the strong team we have in place, as well as an extensive, MRO-specific distribution network throughout the U.S. and Canada.”