Home Depot to acquire SRS Distribution for $18.25B, sees accretion

Home Depot has entered into a definitive agreement to acquire SRS Distribution, a residential specialty trade distribution company across several verticals serving the professional roofer, landscaper and pool contractor. 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 jobsite delivery capabilities, will enable The Home Depot to extend its offering to residential specialty trade pros while better serving renovator/remodelers. Tinker, as well as his senior leadership team, will continue to lead SRS. Tinker and team will work closely with Home Depot. Under the terms of the merger agreement, a subsidiary of The Home Depot will acquire SRS for a total enterprise value of approximately $18.25B. 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. This transaction is expected to be dilutive to earnings-per-share from a GAAP perspective due to amortization expense, but accretive from a cash EPS perspective in the first year, post-closing, excluding synergies. The company intends to maintain its current credit ratings.