We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
HD Agrees to Buy GMS to Strengthen Its SRS Distribution Unit
Read MoreHide Full Article
Key Takeaways
Home Depot is enhancing customer experience through its 'One Home Depot' strategy.
HD will acquire GMS to strengthen its specialty trade distribution via SRS Distribution Inc.
GMS operates a large network distributing building products across the US and Canada.
The Home Depot, Inc. (HD - Free Report) is focused on creating a seamless experience for customers. The company has been progressing well on its "One Home Depot" investment plan, which focuses on expanding the supply chain, technology investments and digital enhancements.
In the latest development, the company has agreed to acquire GMS Inc. (GMS - Free Report) , for its specialty trade distribution subsidiary, SRS Distribution Inc. ("SRS"). GMS, which is a major North American specialty building products distributor, runs a network of distribution centers offering wallboard, ceilings, steel framing and more complementary products in the United States and Canada.
More on Home Depot’s Latest News
Per the merger terms, a subsidiary of SRS will begin a cash tender offer to acquire the entire outstanding shares of GMS’ common stock for $110 a share, representing a total equity value of roughly $4.3 billion and a total enterprise value (including net debt) of around $5.5 billion.
The consummation of this tender offer is subject to customary closing conditions, with the receipt of necessary regulatory approvals and the tender of a number of shares of the common stock representing most of the then-outstanding shares. This transaction, which is anticipated to be accretive to adjusted EPS in the first year post close excluding synergies, is likely to be concluded by fiscal 2025. This will be financed through cash and debt, and is not anticipated to alter the company's plan to return to a 2.0x leverage ratio by fiscal 2026 end.
If the tender offer is effectively completed, a completely-owned subsidiary of SRS will merge with and into GMS, and all the latter’s outstanding shares not tendered in the tender offer will be converted into the right to obtain the same $110 per share in cash offered to GMS’ shareholders within the tender offer.
GMS’ outstanding capabilities, product categories and customer relationships will greatly complement SRS' business today, hence expanding its distribution footprint across the US and Canada. This acquisition will boost SRS’ vision of being a key multi-category building materials distributor by bringing an adjacent vertical that enhances its existing business.
Both units will provide a unique range of fulfillment and service options to the residential and commercial Pro customers. On a combined basis, they will establish a network of above 1,200 locations and a fleet of over 8,000 trucks capable of making tens of thousands of jobsite deliveries daily.
More on Home Depot
Home Depot remains focused on expanding its business and is positioned to capture market share. The company has been creating an interconnected experience for customers, enhancing the pro wallet through its unique ecosystem of capabilities and expanding its store footprint.
The company’s interconnected retail strategy and robust technology infrastructure have been encouraging. Improved search capabilities, an enhanced Pro site experience and strong fulfillment capabilities have been driving online conversions. This Zacks Rank #3 (Hold) company’s strategy of providing an interconnected experience resonates well with customers.
Image Source: Zacks Investment Research
Shares of this home-improvement retailer have gained 12.1% compared with the industry’s 7.8% growth in the past year.
Key Picks in Retail
We have highlighted better-ranked stocks, namely FGI Industries (FGI - Free Report) and Haverty Furniture Companies (HVT - Free Report) .
The Zacks Consensus Estimate for FGI’s current financial-year sales indicates growth of 5.5% from the year-ago figure. The company delivered a trailing four-quarter earnings surprise of 70%, on average.
Haverty Furniture, a home-furnishings retailer in the Southern and Midwestern regions, currently has a Zacks Rank #2 (Buy). HVT delivered an average earnings surprise of 62.8% in the trailing four quarters.
The Zacks Consensus Estimate for HVT’s current financial-year sales indicates growth of 3.9% from the year-ago figure.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
HD Agrees to Buy GMS to Strengthen Its SRS Distribution Unit
Key Takeaways
The Home Depot, Inc. (HD - Free Report) is focused on creating a seamless experience for customers. The company has been progressing well on its "One Home Depot" investment plan, which focuses on expanding the supply chain, technology investments and digital enhancements.
In the latest development, the company has agreed to acquire GMS Inc. (GMS - Free Report) , for its specialty trade distribution subsidiary, SRS Distribution Inc. ("SRS"). GMS, which is a major North American specialty building products distributor, runs a network of distribution centers offering wallboard, ceilings, steel framing and more complementary products in the United States and Canada.
More on Home Depot’s Latest News
Per the merger terms, a subsidiary of SRS will begin a cash tender offer to acquire the entire outstanding shares of GMS’ common stock for $110 a share, representing a total equity value of roughly $4.3 billion and a total enterprise value (including net debt) of around $5.5 billion.
The consummation of this tender offer is subject to customary closing conditions, with the receipt of necessary regulatory approvals and the tender of a number of shares of the common stock representing most of the then-outstanding shares. This transaction, which is anticipated to be accretive to adjusted EPS in the first year post close excluding synergies, is likely to be concluded by fiscal 2025. This will be financed through cash and debt, and is not anticipated to alter the company's plan to return to a 2.0x leverage ratio by fiscal 2026 end.
If the tender offer is effectively completed, a completely-owned subsidiary of SRS will merge with and into GMS, and all the latter’s outstanding shares not tendered in the tender offer will be converted into the right to obtain the same $110 per share in cash offered to GMS’ shareholders within the tender offer.
GMS’ outstanding capabilities, product categories and customer relationships will greatly complement SRS' business today, hence expanding its distribution footprint across the US and Canada. This acquisition will boost SRS’ vision of being a key multi-category building materials distributor by bringing an adjacent vertical that enhances its existing business.
Both units will provide a unique range of fulfillment and service options to the residential and commercial Pro customers. On a combined basis, they will establish a network of above 1,200 locations and a fleet of over 8,000 trucks capable of making tens of thousands of jobsite deliveries daily.
More on Home Depot
Home Depot remains focused on expanding its business and is positioned to capture market share. The company has been creating an interconnected experience for customers, enhancing the pro wallet through its unique ecosystem of capabilities and expanding its store footprint.
The company’s interconnected retail strategy and robust technology infrastructure have been encouraging. Improved search capabilities, an enhanced Pro site experience and strong fulfillment capabilities have been driving online conversions. This Zacks Rank #3 (Hold) company’s strategy of providing an interconnected experience resonates well with customers.
Image Source: Zacks Investment Research
Shares of this home-improvement retailer have gained 12.1% compared with the industry’s 7.8% growth in the past year.
Key Picks in Retail
We have highlighted better-ranked stocks, namely FGI Industries (FGI - Free Report) and Haverty Furniture Companies (HVT - Free Report) .
FGI Industries, which is a supplier of kitchen and bath products, currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for FGI’s current financial-year sales indicates growth of 5.5% from the year-ago figure. The company delivered a trailing four-quarter earnings surprise of 70%, on average.
Haverty Furniture, a home-furnishings retailer in the Southern and Midwestern regions, currently has a Zacks Rank #2 (Buy). HVT delivered an average earnings surprise of 62.8% in the trailing four quarters.
The Zacks Consensus Estimate for HVT’s current financial-year sales indicates growth of 3.9% from the year-ago figure.