On June 30, The Home Depot announced that it had entered into a definitive agreement by its specialty trade distribution subsidiary, SRS Distribution Inc., to acquire GMS Inc., a leading North American GSD operator.
The Home Depot release said: “Under the terms of the merger agreement, a subsidiary of SRS will commence a cash tender offer to purchase all outstanding shares of GMS common stock for US$110 per share, reflecting a total equity value of approximately $4.3 billion and implying a total enterprise value (including net debt) of approximately $5.5 billion.”
The consummation of the tender offer is subject to customary closing conditions, including the receipt of the required regulatory approvals. The transaction is expected to be completed by the end of fiscal 2025.
The Wall Street Journal had announced on June 19 that the world’s largest home improvement retailer was pursuing GMS Inc. The WSJ wrote their article a day after GMS reported its annual results for the year ending April 30, 2025. Those results were mixed, with net sales up 0.2 percent in the year to US$5.514 billion, in a difficult homebuilding economy. Net income was $115.5 million, down 58.2 percent from the previous year’s $276.1 million.
But Atlanta’s big box giant was not the only party interested in taking a run at GMS. Brad Jacobs’s QXO, a roofing-products distributor, had made an unsolicited bid for GMS the day that the company’s lukewarm year-end results were announced. QXO’s offer of $95.20 per share was above (17 percent higher) GMS’s recent trading levels. But QXO’s offer expired June 24, and was not extended, leaving The Home Depot as the sole party with an offer.
GMS Inc. has a Canadian division, and its sales are considerable. Based in Vaughan, Ont., the Canadian operation features some of the biggest GSDs in the country, with names like Shoemaker Drywall Supplies on the Prairies, and Watson Building Supplies, Yvon Building Supplies, and Blair Building Materials (shown in picture) in Ontario. With sales that Hardlines estimates are close to $1 billion in Canada—and some 43 points of sale—GMS Canada is a significant part of the North American GSD scene.
