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The Home Depot Increases Reach Into Contractor Market With Acquisition
The Home Depot® has entered into a definitive agreement for its specialty trade distribution subsidiary, SRS Distribution Inc. (SRS), to acquire GMS Inc. (GMS), a leading North American specialty building products distributor.
The Home Depot’s strategy includes growing its professional contractor business by building differentiated offerings and capabilities that better serve contractors across their entire project – from large, complex jobs to smaller renovations and repairs. In 2024, the company acquired SRS, which gave Home Depot a foothold across multiple verticals including roofing, landscaping, and pool supplies.
The acquisition of GMS will reportedly accelerate SRS’ vision of becoming a leading, multi-category building materials distributor, adding a new vertical that is adjacent to its existing business. GMS is a leading distributor of specialty building products including drywall, ceilings, steel framing, and other complementary products related to construction and remodeling projects in residential and commercial markets.
“The combination of GMS and SRS will provide the residential and commercial Pro customer with more fulfillment and service options than ever before. Together, we’ll create a network of more than 1,200 locations and a fleet of more than 8,000 trucks capable of making tens of thousands of jobsite deliveries per day,” said Dan Tinker, CEO of SRS. “GMS is an industry leader with a proven track record of growth, and we look forward to welcoming the entire GMS team to SRS and capturing the exciting opportunity ahead.”
“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,” said John C. Turner, Jr., president and CEO of GMS. “Since GMS’s founding, we have never strayed from our commitment to be the best distributor in our markets and provide outstanding service for our customers. 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. We are confident that this transaction positions GMS to capitalize on the promising opportunities ahead and accelerate our growth.”
Turner, as well as his senior leadership team, will continue to lead GMS as part of the SRS organization.
Under the terms of the merger agreement, a subsidiary of SRS will commence a cash tender offer to purchase all outstanding shares of GMS common stock for $110 per share, reflecting a total equity value of approximately $4.3 billion and implying a total enterprise value (including net debt) of approximately $5.5 billion.
The transaction is expected to be funded through cash on hand and debt and is not expected to alter the company’s plan to return to a 2.0x leverage ratio by the end of fiscal 2026.
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