Home Depot announced on Thursday its acquisition of SRS Distribution in a significant $18.25 billion deal, a move to expand its presence in the professional sales sector, according to a report by CNBC.

Home Depot to Acquire SRS Distribution

The acquisition, expected to be finalized by the end of the fiscal year, will be financed through a combination of available cash and debt.

With this transaction, Home Depot aims to further solidify its position in the market by catering to contractors, roofers, and other home professionals.

Currently, Home Depot derives half of its revenue from professional customers, with the remaining half coming from do-it-yourself consumers.

This acquisition underscores the company's commitment to capturing a larger share of the lucrative construction market, especially amidst a trend of homeowners reducing their DIY projects.

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"Complementary Accelerator"

CEO Ted Decker told CNBC that the deal is a "complementary accelerator" to Home Depot's existing efforts to attract more professional customers, emphasizing that it expands the company's total addressable market by $50 billion.

SRS Distribution, headquartered in McKinney, Texas, specializes in supplying professionals in industries such as landscaping, pool maintenance, and roofing.

With approximately 11,000 employees and 760 branches spanning 47 states, SRS boasts an extensive infrastructure, including a fleet of 4,000 delivery trucks and a dedicated salesforce catering to home professionals. 

Home Depot, with approximately 2,300 stores, sees this agreement as an opportunity to enhance its online sales and appeal to a wider range of professionals, while still keeping its loyal do-it-yourself customers.

According to CNBC, the retailer's recent acquisition is just one of several deals they have made in the professional space.

Last year, the company made three significant acquisitions. One of them was the $8 billion acquisition of HD Supply. Additionally, they acquired International Designs Group, the owner of Construction Resources, and Temco, a company specializing in appliance delivery and installation.

According to the Wall Street Journal, Home Depot has announced its intention to establish four additional distribution centers specifically designed to serve professionals who require supplies delivered directly to their job sites.

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