PE Tech Report

NEWSLETTER

Like this article?

Sign up to our free newsletter

Bain Capital, Carlyle and Clayton, Dubilier & Rice to acquire USD10.3bn Home Depot unit

Bain Capital Partners, Carlyle Group and Clayton, Dubilier & Rice have agreed to acquire Home Depot’s wholesale distribution business, HD Supply, for USD10.3bn in a transaction expecte

Bain Capital Partners, Carlyle Group and Clayton, Dubilier & Rice have agreed to acquire Home Depot’s wholesale distribution business, HD Supply, for USD10.3bn in a transaction expected to close in the third quarter of this year. The three private equity firms will invest equal amounts of equity in the transaction.

With 2006 revenues of more than USD12bn, HD Supply is the second largest distributor of construction, industrial and maintenance supplies in North America and the market leader in five out of 12 industry sub-sectors, and has nearly 1,000 locations in North America with 26,000 employees.

‘HD Supply enjoys premium positions in an attractive USD400bn-plus market where we have deep experience and prior investment success,’ says CD&R partner David A. Novak. ‘Working with our partners, as well as a strong management team, we are confident that we can achieve multiple strategic and operational improvements to enhance the company’s performance.’

Carlyle Managing Director Dan Pryor says: ‘Management and employees of HD Supply have built tremendous franchises in various building products markets. We look forward to working with the company to deliver more value to customers by enhancing and growing these businesses.’

Adds Bain Capital managing director Steve Zide: ‘HD Supply is a broadly-diversified, best in class company that will thrive as a focused, independent market leader. We are excited to put our extensive operations and distribution business experience to work in helping the company’s strong management team seize this unique opportunity.’

Merrill Lynch, J.P. Morgan Securities and Citigroup Global Markets acted as M&A advisors and Debevoise & Plimpton acted as legal advisor to the private equity firms, while Merrill Lynch, J.P. Morgan Securities and Lehman Brothers are providing financing for the acquisition. PricewaterhouseCoopers’ transaction services group provided financial, tax, benefits and insurance risk management services on behalf of the consortium.

Bain Capital manages several pools of capital including private equity, high-yield assets, mezzanine capital and public equity with approximately USD50bn in assets under management. Since its establishment in 1984, Bain Capital has made private equity investments and add-on acquisitions in over 240 companies around the world, including such distribution companies as Brenntag, Unisource, Keystone Automotive Operations and Broder Brothers. Headquartered in Boston, Bain Capital has offices in New York, London, Munich, Tokyo, Hong Kong and Shanghai.

Carlyle Group, which has USD58.5bn under management, invests in buyouts, venture and growth capital, real estate and leveraged finance in Asia, Europe and North America, focusing on aerospace and defense, automotive and transportation, consumer and retail, energy and power, healthcare, industrial, technology and business services, and telecommunications and media. Since 1987 the firm has invested USD28.3bn of equity in 636 transactions for a total purchase price of USD132bn, and employs nearly 800 people in 18 countries.

Clayton, Dubilier & Rice, which is based in New York and London, boasts portfolio investments include Rexel Group, the world’s leading distribution network of electrical supplies, and car rental giant Hertz, and recently agreed to acquire U.S. Foodservice from Royal Ahold and The ServiceMaster Company in transactions valued at USD7.1bn and USD5.5bn respectively.

Like this article? Sign up to our free newsletter

MOST POPULAR

FURTHER READING

Featured