Home Depot Considers Sale of HD Supply
February 26, 2007
ATLANTA - Just over a year ago, Home Depot completed its $3.2 billion purchase of Orlando, Fla.-based Hughes Supply Inc., a distributor of HVAC, construction, repair, and maintenance products. Now it is considering selling it off, as well as its entire Home Depot Supply division.
The announcement followed a decision earlier in February by the Atlanta-based company to give a seat on its board to an investment group that wants Home Depot to consider, among other things, a leveraged buyout of the entire company as a way to generate shareholder value.
According to an Associated Press report, the group, Relational Investors LLC, had threatened a proxy fight over the home-improvement company’s strategic direction, part of an undercurrent that led to the resignation of former CEO Bob Nardelli in early January after six years at the helm of the company.
Frank Blake, who replaced Nardelli as CEO, said the announcement regarding the possible sale of HD Supply was part of a strategic review the company conducted in November of last year.
The purchase of Hughes Supply last year was Home Depot’s largest acquisition ever. It doubled the size of the HD Supply division, which has annual revenues of approximately $12 billion, has nearly 1,000 locations nationwide and in Canada, and employs more than 26,000 associates, the company said.
Publication date: 02/26/2007