Home Depot’s $5.5B GMS deal gets final antitrust clearance with Canadian OK
Home Depot has checked another box for its pending acquisition, a $5.5 billion deal to buy Tucker-based specialty building products distributor GMS Inc.
The Vinings-based retailer said Friday it has received clearance from the Canadian Competition Bureau in the form of a “no-action” letter. Home Depot and GMS both do business in Canada.
Home Depot says it has now satisfied the antitrust law-related conditions necessary for its acquisition. The U.S. Department of Justice ended its waiting period for antitrust clearance early, the home improvement giant said Aug. 21.
Home Depot earlier this week extended its tender offer for the GMS deal until 11:59 p.m. Sept. 3. It was previously set to expire Aug. 22.
Home Depot is betting it can gain more business from professional contractors, especially as homeowners shy away from large renovation projects because of high interest rates and economic uncertainty.
Last year, the company made its largest acquisition to date, paying $18.3 billion for SRS Distribution, a specialty trade distributor of roofing, landscaping and pool supplies.
SRS plans to buy GMS, which was founded in 1971 and has expanded to become a key distributor of drywall, ceilings, steel framing and other specialty building products.
Home Depot sees the opportunity to simplify the buying process for contractors by reducing their number of suppliers and deliveries, executives said on the company’s second-quarter earnings call.
“GMS will be additive to our organic efforts to better serve pros working on complex projects, enabling us to offer a deeper and broader assortment of interior building products and services, as well as additional fulfillment options,” said Ted Decker, Home Depot chairman, president and CEO.
When combined, SRS and GMS would have a network of 1,200 locations, 3,500 sales associates and a fleet of nearly 8,000 trucks, Decker said on the call.
Home Depot, though, has competition in the pro space. Lowe’s said Aug. 20 it entered an agreement to buy Foundation Building Materials for $8.8 billion. It is a top distributor of building products, such as drywall, metal framing and ceiling systems.
“We’ll never get 100% of someone’s spend,” Decker said of contractors. “But the more we can consolidate activity for them, particularly on a job site … that’s where they told us we have a right to win.”
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