Home Depot to Acquire SRS Distribution

The Home Depot, the world’s largest home improvement retailer, has entered into a definitive agreement to acquire SRS Distribution Inc. (SRS), a residential specialty trade distribution company that serves the professional roofer, landscaper and pool contractor.

SRS will accelerate The Home Depot’s growth with the residential professional customer. SRS complements The Home Depot’s capabilities and will enable the company to better serve complex project purchases occasions.

With this acquisition, The Home Depot says its total addressable market is approximately $1 trillion, an increase of approximately $50 billion.

“SRS is an industry leader with a proven track record of profitable growth across verticals,” says Ted Decker, president, and CEO of 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.”

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.

“SRS’s branch network, coupled with The Home Depot’s 2,000+ 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,” Decker says. “I look forward to welcoming the entire SRS team to The Home Depot and capturing the exciting opportunity ahead.”

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.

“Our team is thrilled to join The Home Depot,” says 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. Tinker and team will work with The Home Depot to deliver the best value proposition for all pro customers.

“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,” says Richard McPhail, executive vice president and CFO.