Home Depot has emerged victorious in a bidding war for GMS, a building-products distributor, agreeing to acquire the company for $4.3 billion in equity, or $5.5 billion including debt. This acquisition strengthens Home Depot’s push into the professional construction supply market. The deal will be executed through a subsidiary of SRS Distribution, a unit of Home Depot, which will launch a cash tender offer for all outstanding GMS shares at $110 per share.
Home Depot Outbids QXO, Wins GMS with Stronger Offer and Strategic Growth Plan
The offer from Home Depot significantly outpaced a recent bid from QXO, which proposed $95.20 per share for GMS. Home Depot’s superior proposal ultimately won the favor of GMS’s board, with Chairman John Gavin stating that the board concluded the deal was in the best interest of shareholders after evaluating multiple opportunities. The acquisition underscores Home Depot’s strategic intent to expand its footprint in the building supply sector.
Home Depot Secures $5.5B GMS Deal, Expands Reach in Professional Building Supply MarketThe announcement triggered a sharp increase in GMS’s stock, which jumped 12% in intraday trading to $108.79. The stock has climbed nearly 30% year-to-date, reflecting strong investor confidence in the company’s trajectory and acquisition appeal. In contrast, Home Depot shares experienced a slight decline of 0.8%, while QXO shares rose by 3% following news of their unsuccessful bid.
Expanded Network and Resources Strengthen Home Depot’s Reach to Professional Contractors and Builders
The acquisition will unite GMS with SRS Distribution, enhancing Home Depot’s service and fulfillment capabilities for professional customers. Dan Tinker, CEO of SRS Distribution, highlighted the benefits of the merger, emphasizing that the combined company will have over 1,200 locations and a fleet exceeding 8,000 trucks. This expanded network will enable a higher volume of jobsite deliveries across both residential and commercial markets.
The merger positions Home Depot to better serve professional contractors and builders by significantly boosting its logistics and distribution capabilities. The integration with GMS aligns with Home Depot’s broader strategy to grow its pro customer segment, which continues to be a key focus for long-term growth. With enhanced reach and resources, the company aims to deliver greater efficiency and responsiveness to a highly competitive market.
