Home Depot announced an agreement for one of its subsidiaries to acquire GMS Inc., a major specialty building products distributor.
Vinings-based Home Depot acquired specialty trade distribution subsidiary SRS Distribution last year for $18.3 billion, and now it plans for SRS to acquire Tucker-based GMS for $5.5 billion, based on total enterprise value.
It’s part of a broader strategy by Home Depot to gain more business from professional contractors for everything from small renovations and repairs to large, complex projects.
GMS was founded in 1971 as Gypsum Management & Supply and expanded through a network of subsidiaries across the U.S. and Canada. The publicly traded company now has more than 300 distribution centers and operates nearly 100 tool sales, rental and service centers.
The deal is expected to add a new business segment to SRS’s business and broaden its distribution footprint.
SRS is a major distributor of roofing, landscaping and pool supplies. GMS is a key distributor of drywall, ceilings, steel framing and other specialty building products, and its offerings and customer base are complementary to SRS’s, according to Home Depot.
The combined SRS and GMS network will have 1,200 locations and a fleet of more than 8,000 trucks to deliver orders.
“The Home Depot acquired SRS as a platform for growth, and SRS continues to demonstrate exceptional execution and strong performance,” Home Depot CEO Ted Decker said in a written statement. “This success gives us confidence that the addition of GMS to the SRS platform will allow us to create even greater value for our customers.”
The Home Depot transaction comes after another company, QXO Inc., in mid-June proposed to acquire GMS for about $5 billion, at $95.20 per share.
After GMS received that unsolicited offer from QXO, it said it would “carefully review and evaluate the unsolicited proposal to determine the course of action that it believes is in the best interests of the Company and all GMS shareholders.”
Home Depot plans to buy all GMS shares through a cash tender offer for $110 per share and expects to use cash on hand and debt to pay for the transaction.
According to GMS Chairman John Gavin, the board determined that the Home Depot transaction is in the best interest of the company and its shareholders.
“Not only does this outcome deliver significant and certain value to our shareholders, but it also has the added benefit of bringing GMS together with The Home Depot and SRS, where we are confident our employees will flourish, our customers and suppliers will benefit from our increased offerings and resources and we will honor the legacy of our founders who made all of this possible,” Gavin said in a written statement.
The acquisition of GMS is subject to regulatory approvals and closing conditions and is expected to close by the end of Home Depot’s current fiscal year, which ends Jan. 31, 2026. If the deal is completed, a subsidiary of SRS will merge with and into GMS.
GMS CEO John C. Turner Jr. and his senior leadership team will continue to lead GMS as part of SRS, according to Home Depot.
“We are excited to join with SRS and The Home Depot, and we believe this transaction delivers significant value to our customers, suppliers and team,” Turner said in a written statement. “We look forward to providing an even wider breadth of product offerings and services while delivering superior value to our professional contractor customers as part of SRS and The Home Depot family.”
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