Buying Home Depot value of $ 5 billion for the uniform building products distributor

The GMS, whose name dates back to the “Gypsum and Display”, which is located in Tucker, GA. , The goal of the most attractive acquisition is hardly. But again, it contains an extensive network of about 320 distribution centers that offer something like Wallboard, ceilings, steel framing and other construction elements. Moreover, GMS runs approximately 100 tool sales, rental centers and services for customer and commercial contracts, all things Covets Home Depot.

The deal follows the acquisition of $ 18 billion in the acquisition of SRS (the entity that already buys GMS). This was the largest acquisition in the company’s history, which aims to help Home Depot win a much larger share of the Mammoth professional contractors sector. These customers usually benefit from Home Depot and Lowe’s and worked closely with retailers to improve homes who meet professionals.

Through the GMS deal, SRS will dominate the market for professional suppliers outside the home (ceilings, billiards, courtyard) and inside (wall panel, steel framing, ceilings), Queen Co Max Rakhlenko analyst wrote in a research note. Reninco praised the deal, saying it “will allow SRS to expand additional vertebra, develop its market share, unify the industry, increase the supply chain and HD distribution useful.”

Although the market was not enthusiastic and was not concerned about the Home Depot GMS news (its shares were flat on the day the deal was announced), the deals together show the Home Depot a major axis and studied in its strategy. Home Depot is widely seen as one of the most successful retailers in the past twenty years, brilliantly benefited in the hot housing market that has resulted in the renewal of more people. But now, Home Depot believes that strong growth in the future will not only come from its major stores that serve relatively simple home people. Instead, he wants a share of the large requests made by specialists in more participating projects such as swimming pool facilities and ceiling repairs. in The first quarter From the current fiscal year, sales in American stores increased for at least a year by 0.2 %, indicating the need for this updated strategy.

“Wrating Pro is a major part of our growth strategy,” said Ann Marie Campbell, Deputy CEO of shops and operations at Home Street in February. It is the Zawiya Stone in the three -year -old Home Depot CEO, Ted Decker, in his efforts to perpetuate the success of the retailer who succeeded violently under his predecessors.

Dealms are a reminder of the long -term warehouse thinking about its strategy in integration and purchases. About 20 years ago, Home Depot focused on integration and purchasing processes to get brands to fill a variety in the store. Then in 2010, she invested in the power of fire and logistics in e -commerce, and equipping stores to eat digital sales. Recently, the focus was on updating a variety of developing areas such as smart home products.

The approach to integration and purchases has served that the well -known retail dealer has long helped her to outperform the Sagittarius competitor in terms of sales growth: last year, its annual sales amounted to 159.5 billion dollars, or nearly twice that it was a decade before.

It revives when one looks at many deals in the world of retail and consumer goods that did not convert companies, but instead led to a significant deletion.

The years that Louis spent following the Canadian retail stores Rona to obtain a foothold north of the border, only to sell them two years ago and a loss of about two billion dollars in this process. TAPESTRY’s acquisition in 2017 for Kate Spade, whose sales decreased by 13 % in the last quarter, led to a number of deletions. Capri Holding Versace was recently sold at a significant loss. Buy Walgrens Boots Alliance a few years from 2000 Help rituals The stores have proven that it was a large waste of money, earlier this year, coca cola It took 760 million dollars in writing its sports drink in Bodyarmor due to disappointing sales, and Dollar tree She said she was selling the Family Dollar Department at a great loss.

Then he goes. About 70 % of integration and purchase deals ultimately from failure. Many of them can feel like Mary passes through a desperate brand for growth, a way to remove a competitor, or simply as a result of a company that exaggerates her ability to circumvent another person. Yes, there are fears that the course of integration and purchase can be made the warehouse margins in the short term. But the deliberate and deliberate Home Depot approach in integration and purchases has greatly resulted in the long run, and it should be a model for major companies in how to do a successful job.