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Atlanta-based home improvement retailer The Home Depot has completed the acquisition of HD Supply Holdings, Inc. for a total enterprise value — including net cash– of approximately $8 billion, according to a press release Thursday. HD Supply is a national distributor of maintenance, repair, and operations (MRO) products in the multifamily and hospitality end markets. The agreement to acquire HD Supply was first announced on November 16, 2020.
“We’re thrilled to welcome HD Supply associates to The Home Depot,” Craig Menear, chairman and CEO of The Home Depot, said in the announcement. “The combination of the two businesses will enable us to better serve both existing and new MRO customers, and I look forward to the value this acquisition will bring to our associates, customers and shareholders.”
HD Supply is one of the largest wholesale distributors in North America. The company provides a broad range of products and value-add services to approximately 300,000 customers with leadership positions in the living space maintenance, repair, and operations sector. It operates approximately 44 distribution centers across 25 states and two Canadian provinces and has 5,500 associates.
HD Supply is also an Atlanta-headquartered company. It opened its Atlanta headquarters in 2018, at 3400 Cumberland Boulevard SE. The $100 million headquarters broke ground in 2016 and houses 1,000 employees.
“We’re thrilled that our associates are joining the Home Depot team and that our customers will be able to benefit from a broader product assortment, expanded delivery options, and enhanced services nationally,” Joe DeAngelo, chairman and CEO of HD Supply, said in a prepared statement when plans for the acquisition were first announced in November. “We are confident that this will position both The Home Depot and HD Supply for continued growth and success in the MRO distribution space.”
The tender offer for all of the outstanding shares of HD Supply expired at midnight, New York City time, at the end of the day on December 23, 2020. American Stock Transfer & Trust Company, LLC — the depository and paying agent for the tender offer — advised The Home Depot that as of the tender offer expiration, a total of 127,928,897 shares had been validly tendered and not validly withdrawn, representing approximately 82.9 percent of the outstanding shares. All of the conditions of the offer have been satisfied and The Home Depot and its subsidiary Coronado Acquisition Sub Inc. have accepted for payment for $56 per share in cash, without interest, subject to any required withholding taxes, all shares validly tendered and not validly withdrawn and will promptly pay for all such shares.
Following its acceptance of the tendered shares, The Home Depot completed the acquisition of HD Supply through a merger of Coronado Acquisition Sub Inc. with and into HD Supply. As a result of the merger, HD Supply became a wholly-owned subsidiary of The Home Depot. In connection with the merger, all HD Supply shares not validly tendered (other than shares held by The Home Depot, Coronado Acquisition Sub Inc., HD Supply, or any of their respective direct or indirect wholly-owned subsidiaries and shares held by stockholders of HD Supply who have perfected their statutory appraisal rights) have been canceled and converted into the right to receive the same $56 in cash (without interest and subject to any required withholding taxes) as will be paid for all HD Supply shares that were validly tendered and not validly withdrawn.
“We plan to access the debt capital markets to raise incremental indebtedness in support of this acquisition,” Richard McPhail, executive vice president and CFO of The Home Depot, said. “We also expect the transaction to be accretive to earnings in fiscal 2021, with potential for significant shareholder value creation over the longer term.”