Business Insights

Why Home Depot Bet $18.25B on Pro Business

Kenneth Metral

Nov 15, 2024 — 1 min read

Image Credit: The Home Depot, Inc./Harrison Keely

In March 2024, Home Depot announced its acquisition of SRS Distribution for $18.25 billion, marking the largest purchase in the company's history. SRS Distribution, based in McKinney, Texas, operates over 760 branches across 47 states, supplying materials to professional roofers, landscapers, and pool contractors.

This strategic move aims to enhance Home Depot's offerings to residential specialty trade professionals and expand its market share among professional builders. The acquisition is expected to increase Home Depot's total addressable market by $50 billion, bringing it to approximately $1 trillion.

The deal is anticipated to close by the end of fiscal 2024, pending customary closing conditions and approvals. Home Depot plans to fund the acquisition through a mix of cash and debt, intending to maintain its current credit ratings.

This acquisition aligns with Home Depot's strategy to strengthen its position in the professional market, which accounts for about half of its business. By integrating SRS's capabilities, Home Depot aims to better serve complex purchasing needs and establish itself as a leader in specialty trade distribution across multiple verticals.

Despite the acquisition news, Home Depot's stock experienced a slight decline of 0.6% on the day of the announcement. However, analysts view the move as a positive step toward long-term growth and competitiveness in the evolving home improvement industry.

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