The Home Depot Inc. ( HD ) is deepening its investment in serving professional contractors with a major acquisition by its distribution arm, SRS Distribution Inc.
SRS announced Monday that it has signed a definitive agreement to acquire GMS Inc ( GMS ). , a top distributor of specialty building products across North America.
The deal values GMS at approximately $4.3 billion in equity and $5.5 billion in enterprise value, with a cash offer of $110 per share. The acquisition will be funded through a mix of available cash and debt.
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It is not expected to affect The Home Depot’s plan to return to a 2.0x leverage ratio by the end of fiscal 2026. The companies expect the transaction to close by the end of fiscal 2025.
The deal is designed to broaden SRS’s capabilities and service offerings for residential and commercial construction projects by adding GMS’s portfolio of drywall, ceilings, steel framing, and related products.
The move expands The Home Depot’s reach in the pro contractor space, building on its earlier acquisition of SRS in 2024 to establish a leadership position in specialty distribution.
The transaction is expected to be accretive to adjusted earnings per share in the first year following closing, excluding synergies.
The acquisition is a significant step in The Home Depot’s multi-pronged strategy to dominate distribution in categories that extend beyond retail. GMS’s presence in core building materials complements SRS’s existing verticals in roofing, landscaping, and pool supplies.
The companies will operate from more than 1,200 locations and utilize a fleet exceeding 8,000 delivery trucks to service job sites across the U.S. and Canada.
SRS CEO Dan Tinker noted the scale and service capabilities the merger unlocks for both residential and commercial customers. Ted Decker, chair, president, and CEO of The Home Depot ( HD ), emphasized the proven success of the SRS platform and said this move would create further opportunities to integrate and grow service offerings for pro clients.
John C. Turner, Jr., CEO of GMS, and his senior leadership team will continue to lead the business post-acquisition under the SRS umbrella. Turner said joining SRS and The Home Depot ( HD ) provides an opportunity to accelerate GMS’s mission while expanding the value delivered to contractors across North America.
As of May 4, Home Depot ( HD ) held $1.369 billion in cash and equivalents.
Related ETFs: iShares U.S. Home Construction ETF ( ITB ) , SPDR S&P Homebuilders ETF .
Price Action: HD shares are trading lower by 0.19% at $368.05, and GMS is up 11.8% at $108.83 at last check Monday.
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