Home Depot Takes Over Hughes Supply

April 17, 2006
/ Print / Reprints /
ShareMore
/ Text Size+
Plans for Hughes Supply include uniting it with Home Depot Supply, making a division that will serve industry professionals.
It's now official. Hughes Supply Inc., one of the leading distributors of construction, repair, HVAC, and maintenance products, is under Home Depot's umbrella.

According to Home Depot, Hughes Supply and Home Depot Supply will be combined to create a division designed to serve business-to-business customers, including homebuilders, professional contractors, municipalities, and maintenance professionals. In a release, Home Depot said the combination of the two "will provide customers with a continuum of products and services from infrastructure through construction to lifetime maintenance."

In accordance with the terms of the agreement as announced in early January of this year, Home Depot acquired Hughes Supply for aggregate consideration of $3.51 billion, including the payment of $46.50 per outstanding share and the assumption of $325 million in net debt. According to Home Depot, the close of the Hughes Supply transaction marks its largest acquisition ever, more than doubling the size of Home Depot Supply. The newly combined organization has more than 20,000 employees in more than 900 locations with projected 2006 combined sales approaching $12 billion.

"Home Depot Supply and Hughes Supply are a great strategic fit, and this acquisition is an important element of our growth strategy to expand our presence in the $410 billion professional market," said Bob Nardelli, chairman, president, and CEO of Home Depot.

"We plan to repeat in the professional space the same type of market transformation The Home Depot pioneered and executed in the do-it-yourself retail space. We know that joining forces with Hughes Supply, a great company with a proven leadership team, a solid supplier base, and a reputation for excellent customer service, will help us reach our goal."

Hughes Supply, which has a 78-year history, operates in 40 states with over 500 locations. The integration adds to Home Depot Supply's positions in waterworks, nonindustrial facility maintenance, professional construction supply and plumbing, while adding new platforms in electric utilities, industrial pipes, valves and fittings, and electrical products distribution.

"The Hughes Supply acquisition provides scale to accelerate the execution of Home Depot Supply's strategy and immediately gives us an unparalleled national footprint of more than 900 locations," said Joe DeAngelo, executive vice president, Home Depot Supply.

"As we forge a new, combined team unlike anything our industry has ever seen, we will continue to honor our proud past as we embrace our bright future. Together, we will provide local, national, and government customers with the broadest range of products and the best customer service in the marketplace. Our team of talented, committed associates is the key to success, and I'm looking forward to what we will accomplish together."

DeAngelo identified four specific steps Home Depot Supply is taking to support its plan to become the world's largest diversified wholesale distributor, with more than 1,500 locations, and to grow sales to $23 to $28 billion, or 18 percent to 19 percent of The Home Depot's overall sales by 2010:

  • Expand every business into new geographies and increase productivity of every location by adding product adjacencies.

  • Establish a portfolio of pro platforms covering every phase of execution from infrastructure to construction to lifetime maintenance.

  • Deliver customer productivity by building upon established relationships in each market that are enhanced by customer-facing digital tools.

  • Ensure low-cost provider status by leveraging the entire supply chain of The Home Depot.

    The Home Depot said it funded the acquisition with proceeds from $4 billion in senior notes ($1 billion in 5-year notes and $3 billion in 10-year notes) issued March 24 of this year, pursuant to the company's $5 billion shelf registration. It said the deal will be accretive to earnings per share within its first year.

    For more information, visit www.hughessupply.com.

    Publication date: 04/17/2006

  • Did you enjoy this article? Click here to subscribe to The NEWS Magazine

    Recent Articles by Mark Skaer

    You must login or register in order to post a comment.

    Multimedia

    Videos

    Image Galleries

    2014 MCAA Annual Convention

    Scenes from the 2014 MCAA Annual Convention in Scottsdale, Ariz.

    Podcasts

    NEWSmakers: Julian Scadden

    Training is an ongoing process. Julian will discuss how you can generate maximum return on time and energy invested training by following a three part process. Listen to this podcast to get expert tips on training, tracking and follow up. 

    More Podcasts

    THE MAGAZINE

    ACHRNEWS

    NEWS 04-14-14 cover

    2014 April 14

    Check out the weekly edition of The NEWS today!

    Table Of Contents Subscribe

    SERVICE CALLS POLL

    Which statement on service calls best applies to your business?
    View Results Poll Archive

    HVACR INDUSTRY STORE

    plumbing-hvac.gif
    2014 National Plumbing & HVAC Estimator

    Every plumbing and HVAC estimator can use the cost estimates in this practical manual!

    More Products

    Clear Seas Research

     

    Clear Seas ResearchWith access to over one million professionals and more than 60 industry-specific publications, Clear Seas Research offers relevant insights from those who know your industry best. Let us customize a market research solution that exceeds your marketing goals.

    DON'T MISS A THING

    Magazine image
     
    Register today for complete access to ACHRNews.com. Get full access to the latest features, Extra Edition, and more.

    STAY CONNECTED

    facebook icontwitter iconyoutube iconLinkedIn i con