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Home Depot (HD) Acquires HD Supply, Enhances MRO Portfolio
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The Home Depot Inc. (HD - Free Report) has concluded the acquisition of HD Supply Holdings, Inc. for an enterprise value of $8 billion. The transaction includes HD Supply’s Canada and USABlueBook operations. Per the tender offer, Home Depot and its subsidiary Coronado Acquisition Sub Inc. paid out $56 per share in cash to shareholders of HD Supply. The acquisition was executed through the merger of Coronado Acquisition Sub Inc. with HD Supply, making HD Supply the wholly-owned subsidiary of Home Depot.
Home Depot funded the transaction through cash on hand and debt. The company expects the transaction to be accretive to its fiscal 2021 earnings.
On Nov 16, Home Depot signed an agreement to acquire HD Supply. The acquisition will place Home Depot as a premier provider of maintenance, repair and operations (“MRO”) products in the marketplace. The MRO market is valued at about $55 billion. Moreover, HD Supply’s business adds value to Home Depot’s existing MRO business through robust products and service capabilities, a knowledgeable workforce, and a widespread MRO-specific distribution network across the United States and Canada. The acquisition is likely to help accelerate sales growth by effectively serving existing and new customers.
Zacks Rank, Estimate Trend and Price Performance
With a market capitalization of $291.7 billion, Home Depot currently carries a Zacks Rank #3 (Hold). The company is gaining from increased renovation and maintenance projects amid the pandemic. It is ramping up assortments and delivery systems to effectively meet market needs. Moreover, the company’s interconnected retail strategy and underlying technology infrastructure have helped consistently boost web traffic in the past six months.
In the past 30 days, the company’s earnings estimates have been unchanged at $11.76 for fiscal 2020 (ending January 2021) and have moved up 0.4% to $12.25 for fiscal 2021 (ending January 2022).
In the past year, its shares have gained 24.7% compared with the industry’s growth of 28.3%.
Tecnoglass Inc. (TGLS - Free Report) has a long-term earnings growth rate of 20% and a Zacks Rank #2 (Buy) at present.
Builders FirstSource, Inc. (BLDR - Free Report) , also a Zacks Rank #2 stock, delivered an earnings surprise of 53.5%, on average, in the trailing four quarters.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.4% per year.
These 7 were selected because of their superior potential for immediate breakout.
Image: Bigstock
Home Depot (HD) Acquires HD Supply, Enhances MRO Portfolio
The Home Depot Inc. (HD - Free Report) has concluded the acquisition of HD Supply Holdings, Inc. for an enterprise value of $8 billion. The transaction includes HD Supply’s Canada and USABlueBook operations. Per the tender offer, Home Depot and its subsidiary Coronado Acquisition Sub Inc. paid out $56 per share in cash to shareholders of HD Supply. The acquisition was executed through the merger of Coronado Acquisition Sub Inc. with HD Supply, making HD Supply the wholly-owned subsidiary of Home Depot.
Home Depot funded the transaction through cash on hand and debt. The company expects the transaction to be accretive to its fiscal 2021 earnings.
On Nov 16, Home Depot signed an agreement to acquire HD Supply. The acquisition will place Home Depot as a premier provider of maintenance, repair and operations (“MRO”) products in the marketplace. The MRO market is valued at about $55 billion. Moreover, HD Supply’s business adds value to Home Depot’s existing MRO business through robust products and service capabilities, a knowledgeable workforce, and a widespread MRO-specific distribution network across the United States and Canada. The acquisition is likely to help accelerate sales growth by effectively serving existing and new customers.
Zacks Rank, Estimate Trend and Price Performance
With a market capitalization of $291.7 billion, Home Depot currently carries a Zacks Rank #3 (Hold). The company is gaining from increased renovation and maintenance projects amid the pandemic. It is ramping up assortments and delivery systems to effectively meet market needs. Moreover, the company’s interconnected retail strategy and underlying technology infrastructure have helped consistently boost web traffic in the past six months.
In the past 30 days, the company’s earnings estimates have been unchanged at $11.76 for fiscal 2020 (ending January 2021) and have moved up 0.4% to $12.25 for fiscal 2021 (ending January 2022).
In the past year, its shares have gained 24.7% compared with the industry’s growth of 28.3%.
3 Better-Ranked Retail Stocks
Beacon Roofing Supply, Inc. (BECN - Free Report) delivered an earnings surprise of 13.6%, on average, in the trailing four quarters. It presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Tecnoglass Inc. (TGLS - Free Report) has a long-term earnings growth rate of 20% and a Zacks Rank #2 (Buy) at present.
Builders FirstSource, Inc. (BLDR - Free Report) , also a Zacks Rank #2 stock, delivered an earnings surprise of 53.5%, on average, in the trailing four quarters.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.4% per year.
These 7 were selected because of their superior potential for immediate breakout.
See these time-sensitive tickers now >>