Home Depot heads deeper into the building supply business with $5 billion acquisition of GMS

Key Points

• Home Depot is acquiring GMS for $110 per share, valuing the deal at about $4.3 billion in equity and $5.5 billion including debt.
• This marks Home Depot’s second major acquisition in just over a year after buying SRS Distribution, underscoring a strategic push into building-supply services for professional builders.
• The combined GMS and SRS network will span more than 1,200 locations with over 8,000 delivery trucks, boosting jobsite fulfillment and service options.
• Home Depot moved quickly to outbid rival QXO’s $5 billion offer, and the transaction is expected to close by the end of fiscal 2025.

Home Depot is buying specialty building products distributor GMS for $4.3 billion, the second notable acquisition in a little over a year that emphasizes a deliberate push by the home improvement chain into building and materials supply.

The acquisitions arrive as booming sales from the pandemic fade and Home Depot intensifies its focus on professional builders.

GMS Inc. of Tucker, Georgia, is a distributor of specialty building products like drywall, steel framing and other supplies used in both residential and commercial projects.

A subsidiary of Home Depot’s SRS Distribution Inc., the supply company it bought last year, will start a cash tender offer to buy all outstanding shares of GMS for $110 per share. The total equity value of the transaction is approximately $4.3 billion. The deal is worth about $5.5 billion, including debt.

Home Depot purchased SRS Distribution, a materials provider for professionals, for more than $18 billion including debt. SRS provides materials for professionals like roofers, landscapers and pool contractors.

“The combination of GMS and SRS will provide the residential and commercial Pro customer with more fulfillment and service options than ever before,” SRS CEO Dan Tinker said in a statement. “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.”

Home Depot, based in Atlanta, moved quickly to acquire GMS, putting in its own bid less that two week after the company QXO offered $5 billion, according to a regulatory filing. Billionaire Brad Jacobs is the CEO of QXO, which was created to snap up companies in the building supply sector. In April QXO completed its approximately $11 billion acquisition of Beacon Roofing Supply.

The GMS transaction with Home Depot is expected to close by the end of fiscal 2025. Shares of the GMS jumped nearly 12% at the opening bell. Home Depot shares declined slightly.