Latest news with #SRSDistribution
Yahoo
05-07-2025
- Business
- Yahoo
Truist Reaffirms Buy Rating as Home Depot Targets Pro Segment with GMS Deal
The Home Depot, Inc. (NYSE:HD) ranks among the best set-it-and-forget-it stocks to buy. Truist Securities kept its $417 price target and Buy rating on The Home Depot, Inc. (NYSE:HD) on June 23 in response to the retailer's roughly $5 billion offer to buy specialist construction materials distributor GMS. Rob Wilson / According to Truist's repo, the GMS acquisition would provide The Home Depot, Inc. (NYSE:HD) more distribution options and hasten its entry into the competitive professional contractor market. The potential acquisition reflects Home Depot's ongoing efforts to increase its market share in the professional contractor sector, following the company's recent $18 billion acquisition of SRS Distribution. Although the timing might not be ideal, Truist noted that The Home Depot, Inc. (NYSE:HD) needed to move fast once GMS became available as an acquisition option since the company had planned to focus on debt reduction after the SRS purchase. A leading American company in the retail home improvement industry, The Home Depot, Inc. (NYSE:HD) offers a broad spectrum of tools, construction supplies, appliances, and services, including fuel and vehicle rentals. While we acknowledge the potential of HD as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. Read More: and Disclosure: None. Se produjo un error al recuperar la información Inicia sesión para acceder a tu portafolio Se produjo un error al recuperar la información Se produjo un error al recuperar la información Se produjo un error al recuperar la información Se produjo un error al recuperar la información
Yahoo
04-07-2025
- Business
- Yahoo
Why GMS Stock Crushed It This Week
The company was bought out by a larger peer. Although that wasn't exactly a surprise, it did give the shares a double-digit pop at the start of the week. 10 stocks we like better than Gms › Lately, GMS (NYSE: GMS) has done very well on the stock market for a company that'll soon cease to be an independent business. The building products distributor was acquired by a high-profile peer after a brief bidding war, which in combination with several analyst price target bumps gave its shares a real lift. According to data compiled by S&P Global Market Intelligence, they increased by almost 13% in price over the holiday-shortened week. On Monday, it was announced that a division of SRS Distribution, a subsidiary of DIY goods retailer Home Depot, swooped in to acquire GMS. Previously, GMS had received an unsolicited, all-cash buyout offer from fellow building products supplier QXO. The Home Depot unit's bid of $110 per share for GMS -- also fully in cash -- was essentially an offer it couldn't refuse, as it was far more generous than QXO's $95.20. Home Depot had been rumored to be sniffing around GMS once QXO's offer was made public, so GMS stock didn't experience that dramatic a pop -- its near-13% rise this week was basically the upside after the Home Depot news was released. In its press release touting the deal, GMS wrote that "We look forward to providing an even wider breadth of product and service offerings while delivering superior value to our professional contractor customers as part of SRS and The Home Depot family." After the acquisition was announced, several analysts tracking GMS stock raced to update their takes. Not surprisingly, they tended to change their price target to the $110 per share Home Depot is paying. I'd agree with that. At this point, I don't think another well-capitalized bidder is going to suddenly materialize with a richer offer for GMS. For shareholders of the company, congratulations on the deal, and enjoy your profits. Before you buy stock in Gms, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Gms wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $699,558!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $976,677!* Now, it's worth noting Stock Advisor's total average return is 1,060% — a market-crushing outperformance compared to 180% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 30, 2025 Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Home Depot. The Motley Fool has a disclosure policy. Why GMS Stock Crushed It This Week was originally published by The Motley Fool Sign in to access your portfolio
Yahoo
04-07-2025
- Business
- Yahoo
Home Depot's latest deal signals a strategic shift in M&A
Good morning. Retailer Home Depot has been in business for nearly 50 years, and its disciplined approach to dealmaking has contributed to its solid growth. That's the topic my colleague Phil Wahba explores in a new Fortune article. Home Depot, No. 24 on the Fortune 500, announced this week that one of its business units is acquiring building-products distributor GMS (Gypsum Management and Supply) for about $4.3 billion, prevailing in a bidding war. The deal follows Home Depot's $18 billion acquisition last year of SRS Distribution (which is the entity actually buying GMS)—the largest acquisition in the company's history. According to Wahba, these acquisitions mark a shift in Home Depot's strategy. In the first quarter of the current fiscal year, sales at U.S. stores open at least a year rose just 0.2%, highlighting the need for change. 'Home Depot is widely viewed as one of the most successful retailers of the last 20 years, one that has deftly leveraged a hot housing market that led to more people renovating their homes,' Wahba writes. The company now anticipates that future growth will not come solely from its 2,000 big-box stores serving DIY customers, but increasingly from large orders placed by professionals for more complex projects, such as roof repairs. GMS, based in Georgia, operates a network of about 320 distribution centers offering wallboard, ceilings, steel framing, and other construction materials. It also runs roughly 100 tool sales, rental, and service centers for residential and commercial contractors—'all things Home Depot covets,' according to Wahba. Home Depot has long been thoughtful about its M&A strategy, Wahba notes, a discipline that has helped it outperform archrival Lowe's in sales growth. You can read the complete article here. Home Depot isn't the only major U.S. company active in M&A this year. For example, tech giant HPE (Hewlett Packard Enterprise) announced on Wednesday the completion of its acquisition of Juniper Networks for approximately $14 billion. 'This strategic transaction accelerates our transformation to a higher-margin, higher-growth portfolio and positions HPE for long-term, profitable revenue expansion,' HPE CFO Marie Myers stated in a LinkedIn post. The Americas led global M&A with $908 billion in deal value in the first half of 2025 (61% of the total), up from $722 billion (55%) the previous year, according to PwC's mid-year M&A update. Meanwhile, Bain & Company reports that some companies are not allowing tariffs—or the changed economic world order they represent—to derail M&A activity. With disciplined dealmaking and a focus on long-term growth, many companies are positioning themselves to thrive. The next CFO Daily will be in your inbox on Monday. Enjoy the July Fourth holiday. Sheryl This story was originally featured on Sign in to access your portfolio
Yahoo
03-07-2025
- Business
- Yahoo
Home Depot Acquires Building Products Distributor GMS
Home Depot wants to improve its bottom line, whether homeowners are embracing home improvement or not. It's why the company paid $4.3 billion this week to win a bidding war for building products distributor GMS. The acquisition is among a series of moves that give the big box retailer a critical direct line to commercial contractors. READ ALSO: OPEC+ Wants to Pump Its Way Back to the Top and Microsoft Cuts Another 9,000 Employees Home Depot's retail roots have historically made it a one-stop shop for homeowners tackling big home improvement projects with a do-it-yourself mentality. The problem with that strategy in 2025? Thanks to a slowdown in home sales and persistently high interest rates, practically nobody is doing DIY home improvement projects anymore. Which is why the retail player has spent the past few years seeking avenues to diversify into the typically steadier business of professional construction projects (sorry, suburban dads, but haphazardly wielding power tools and insisting 'don't worry, I'm a pro' does not actually make you one). The push into the pro market began in earnest last year, when Home Depot dropped $18.5 billion to buy SRS Distribution, which sells supplies to roofers, landscapers and other professionals in the contracting world. The acquisition of GMS — which was completed at about a 35% premium to the company's share price, and including debt, holds a total enterprise value of around $5.5 billion — gives it an ever deeper reach in the professional world: Based in Tucker, Georgia, GMS operates about 320 distribution centers and sells, rents and delivers products such as drywall and steel framing directly to contractors at commercial job sites. Home Depot is completing the acquisition through SRS, which will remain a subsidiary of the big-box retail company. Together, GMS and SRS will operate 'a network of more than 1,200 locations and a fleet of more than 8,000 trucks capable of making tens of thousands of jobsite deliveries per day,' SRS CEO Dan Tinker said in a statement. Build Your Own Business: Home Depot's bidding-war win is billionaire Brad Jacobs' loss. Last year, Jacobs launched a building products company, QXO, with the express purpose of creating an industry empire through mergers and acquisitions. GMS had been Jacobs' latest target; he offered $5 billion in cash for the firm last week and threatened a hostile takeover if the bid was rejected. Home Depot ultimately topped that bid. Which means to build a bigger construction business, Jacobs may have to rely on a little less M&A and a little more DIY spirit. This post first appeared on The Daily Upside. To receive delivering razor sharp analysis and perspective on all things finance, economics, and markets, subscribe to our free The Daily Upside newsletter. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Yahoo
02-07-2025
- Business
- Yahoo
Home Depot's $5 billion purchase of an unsexy building products distributor is a prime example of smart M&A
Earlier this week, Home Depot said one of its business units was buying building-products distributor GMS for some $4.3 billion, prevailing in a bidding war and showing just how seriously the home-improvement chain is about winning the market for professional contractors at a time the do-it-yourself market is tough going. GMS, whose name stands for Gypsum Management and Supply and which is based in Tucker, Ga., is hardly the sexiest acquisition target. But then again, it has a wide network of some 320 distribution centers that offer thing like wallboard, ceilings, steel framing, and other construction items. What's more, GMS operates roughly 100 tool sales, rental, and service centers for residential and commercial contract customers, all things Home Depot covets. The deal follows Home Depot's $18 billion landmark acquisition last year of SRS Distribution (which is the entity actually buying GMS). That was the largest acquisition in the company's history, aimed at helping Home Depot win a much bigger share of the mammoth professional-contractors segment. Those customers have typically made little use of Home Depot and Lowe's and worked more closely with home-improvement retailers that cater to professionals. With the GMS deal, SRS will dominate the market for professional suppliers both outside the home (roofing, pool, yard) and inside (wallboard, steel framing, and ceilings), Cowen analyst Max Rakhlenko wrote in a research note. Rakhlenko praised the deal, saying it 'would allow SRS to expand into additional verticals, grow market share, consolidate the industry, and meaningfully increase HD's supply chain and distribution network.' While the market was neither excited nor alarmed by Home Depot's GMS news (its shares were flat on the day the deal was announced), the deals together show Home Depot is making a major, thoughtful pivot in its strategy. Home Depot is widely viewed as one of the most successful retailers of the last 20 years, one that has deftly leveraged a hot housing market that led to more people renovating their homes. But now, Home Depot believes that robust growth in the future won't come just from its 2,000 big-box stores serving people doing relatively simple home projects. Instead, it wants a share of the large orders placed by professionals for much more involved projects such as swimming pool installations and roof repairs. In its first quarter of the current fiscal year, sales at U.S. stores open for at least a year rose a paltry 0.2%, showing the need for this updated strategy. 'Growing pro is a key part of our growth strategy,' Ann-Marie Campbell, senior executive vice president of U.S. stores and operations at Home Depot, told Wall Street analysts in February. And it is the cornerstone of Home Depot's CEO of three years, Ted Decker, in his efforts to perpetuate the success of a retailer that had succeeded wildly under his two predecessors. The deals are a reminder of how thoughtful Home Depot has long been in its M&A strategy. About 20 years ago, Home Depot focused its M&A on acquiring brands to fill out its in-store assortment. Then, in the 2010s, it invested in its e-commerce firepower and logistics, and equipping stores to support digital sales. More recently, the focus was on modernizing its assortment for growing areas like smart home products. That M&A approach has served the famously disciplined retailer well and helped it long outperform archrival Lowe's in terms of sales growth: Last year, Home Depot's annual sales topped $159.5 billion, almost double what they were a decade earlier. And it is refreshing when one looks at so many of the deals in the retail and consumer goods world that have not transformed companies but instead led to big write-downs. Lowe's spent years pursuing Canadian retailer Rona to get a foothold north of the border, only to sell it off two years ago and losing about $2 billion in the process. Tapestry's acquisition in 2017 of Kate Spade, whose sales fell 13% last quarter, has led to a number of write-downs. Capri Holdings recently sold Versace at a big loss. Walgreens Boots Alliance's purchase a few years ago of 2,000 Rite Aid stores proved to be a major waste of money. Earlier this year, Coca-Cola took a $760 million write-down of its BodyArmor sports drink because of disappointing sales, and Dollar Tree said it was selling its Family Dollar division at a great loss. And on and on it goes. Some 70% of M&A deals end up being failures. A good many of them can feel like Hail Mary passes by a brand desperate for growth, or a way to take out a rival, or simply the result of one company overestimating its ability to turn around another. Yes, there are concerns that an M&A cycle could pinch Home Depot's margins in the short term. But Home Depot's deliberate and thoughtful approach to M&A has largely paid off over the long term, and should serve as a model to big companies in how to do successful dealmaking. This story was originally featured on
