GMS shares jumped almost 12% after it was revealed it is being acquired by Home Depot Inc (NYSE:HD, ETR:HDI)'s specialty trade distribution subsidiary SRS.
The deal values GMS, a leading North American distributor of specialty building products, at $4.3 billion in equity and about $5.5 billion including debt.
It values GMS shares at $110 each. The stock jumped 11.7% to just shy of this at $109 late morning on Monday.
GM will be integrated into SRS, which The Home Depot acquired in 2024 to build out its trade distribution capabilities. Together, the two distributors will operate more than 1,200 locations and manage a fleet of over 8,000 trucks, enabling tens of thousands of jobsite deliveries per day.
The acquisition is part of Home Depot’s strategy to grow its share of spending from professional customers, a segment that tends to drive larger and more frequent purchases than its core do-it-yourself base.
SRS already serves a range of verticals, including roofing, landscaping, and pool supplies. Adding GMS broadens its offerings and extends its reach in both residential and commercial construction markets across the US and Canada.
"We are excited to join with SRS and The Home Depot, and we believe this transaction delivers significant value to our customers, suppliers and team,” GMS CEO John Turner Jr said in a statement.
“We look forward to providing an even wider breadth of product offerings and services while delivering superior value to our professional contractor customers as part of SRS and The Home Depot family.”
Turner and his leadership team will continue to lead GMS as part of SRS.
The acquisition is expected to close by the end of fiscal 2025.