11:19 AM EDT, 07/01/2025 (MT Newswires) -- GMS (GMS) investors stand to benefit from the "strong value" of the $4.3 billion acquisition by Home Depot ( HD ) at $110 a share, RBC Capital Markets said Monday in a report.

A $147.5 million termination fee payable by GMS to Home Depot ( HD ) reinforces the expectation that "a competing bid is unlikely," RBC said. Home Depot's ( HD ) offer topped an unsolicited bid of $95.20 a share from QXO (QXO).

The deal represents a significant premium to GMS's recent trading range of $70 to $80 a share and is expected to close by the end of Home Depot's ( HD ) fiscal year in January, the report said.

The acquisition may indicate "an acceleration of a 'distribution arms race'" following Home Depot's ( HD ) 2024 acquisition of SRS Distribution and Lowe's (LOW) recent purchase of Artisan Design Group, RBC said. This trend supports valuation multiples across the building products distribution sector, the report said.

RBC raised its price target on GMS stock to $110, in line with the acquisition price, and maintained its sector perform rating.

Price: 109.14, Change: +0.39, Percent Change: +0.36