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Home Depot confirms sale of supply division for reduced price of $8.5 billion

Home Depot confirms sale of supply division for reduced price of $8.5 billion

The Home Depot Inc. said Tuesday it has agreed to sell its wholesale distribution business to a private equity group for $8.5 billion (euro6.22 billion) _ about $1.8 billion (euro1.32 billion) less than originally agreed.
The announcement comes after several days of intense negotiations to preserve the deal at the lower price.
The sale price as announced in June was $10.3 billion (euro7.54 billion). But turbulent credit conditions and a tightening housing market forced the talks on new terms.
As part of the amended terms, Home Depot will purchase a 12.5 percent equity interest in the whole business for $325 million (euro237.96 million) and will guarantee a $1 billion (euro730 million) senior secured loan of HD Supply, a business that was designed to serve contractors.
The sale is scheduled to take place on Thursday.
"Despite the softness in the financing and residential construction markets, the terms of the HD Supply sale deliver shareholder value today and in the future as we will share in HD Supply's upside potential," said Frank Blake, chairman and CEO of Home Depot, the world's biggest home improvement store chain.
"We are now focused on our retail business," he said.
The buyers include affiliates of Bain Capital Partners, the Carlyle Group and Clayton, Dubilier & Rice.
Home Depot said it expects to net approximately $7.9 billion (euro5.78 billion) in cash proceeds from the sale.


Updated : 2021-01-25 05:53 GMT+08:00