Home-improvement retailer The Home Depot acquired SRS Distribution for approximately $18.25 billion. McKinney, Texas-based SRS Distribution is a specialty trade distribution company operating across several verticals, including Heritage Landscape Supply Group and Heritage Pool Supply Group, serving roofers, landscapers, and pool contractors.
Growing the share of wallet with the professional customer is one of The Home Depot’s three growth priorities, and the retailer said the acquisition will help fuel its next growth chapter while helping the company better sell the whole project and capture customers—specialty trade contractors—it has not traditionally served. For the past several years, the retailer has been building out its capabilities to better serve the pro customer, which represents about half of the sales by The Home Depot.
“The ecosystem that we are building is focused on the general contractor who shops cross-category and benefits from consolidating product purchases,” Ted Decker, chair, president, and CEO of The Home Depot, said during an investors call announcing the deal. “Going forward, we will be able to leverage SRS’ deep product catalog and distribution capabilities to help us better serve the complex project purchase occasion. In addition, SRS will continue to serve their specialty trade pro customers who may be working on their own projects or may be a subcontractor working on a complex project with one of our targeted general contractors.”
Todd Tomalak, principal of building products for Zonda, said the acquisition is a testament to how seriously The Home Depot is taking the pro contractor segment.
“Our research shows that the pro contractor will drive more influence on product (and margins) than ever before,” Tomalak said. “We think there is an additional $8 billion of revenue to be gained simply because of the churn occurring on where pro contractors shop, and this move captures a piece of that immediately. Given the extremely tight labor backdrop for the remainder of this decade, investing in the pro is table stakes. The Home Depot just signaled they mean business.”
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