The Home Depot’s subsidiary SRS Distribution has entered a definitive agreement to acquire specialty building products distributor Gypsum Management & Supply (GMS), winning a bidding war over roofing products distributor QXO.
Under the terms of the agreement, SRS will acquire all outstanding shares of GMS for $110.00 per share, reflecting a total equity value of $4.3 billion and implying a total enterprise value of $5.5 billion.
GMS operates a network of more than 320 distribution centers with product offerings of wallboard, ceilings, steel framing, and complementary construction products. The company also operates nearly 100 tool sales, rental, and service centers in the United States and Canada.
The acquisition further expands Home Depot’s investment into the professional customer. The home-improvement retailer acquired McKinney, Texas-based SRS Distribution for $18.25 billion in March 2024. At the time of the acquisition, Home Depot expressed optimism penetrating the specialty trade contractor category, a customer segment it had not traditionally served.
“At this point, the message is quite clear: The Home Depot is expanding into pro-heavy projects that would have been out of reach for the company 24 months ago,” says Todd Tomalak, principal, advisory of building products for Zonda. “Home Depot is executing the strategic plan communicated to investors that market share gains among the ‘complex pro’ will drive their next phase of expansion.”
Earlier in the month, GMS fielded a proposal for acquisition from QXO to acquire all outstanding shares for approximately $5 billion, offering $95.20 per share in cash.
“It’s worth noting that both QXO and Home Depot bid during a period of significant industry softness, which could be a signal of industry bottom ahead within the next 12 months,” Tomalak notes.
John Gavin, chair of GMS, said after consideration of The Home Depot’s offer as well as “other potential opportunities for the company,” the GMS board determined The Home Depot proposal represented the best outcome for shareholders, customers, and suppliers.
“We are excited to join with SRS and The Home Depot, and we believe this transaction delivers significant value to our shareholders, customers, suppliers, and team,” says John Turner, president and CEO of GMS. “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.”
Turner will continue to lead GMS as part of the SRS organization.
Ted Decker, chair, president, and CEO of The Home Depot, said the first year working with SRS Distribution has allowed the company to capture significant synergies, including cross-selling new products and service offerings to both Home Depot and SRS customers and advancing Home Depot’s enterprise trade credit program through the SRS platform.
“This success gives us confidence that the addition of GMS to the SRS platform will allow us to create even greater value for our customers,” Decker said.
The combined GMS and SRS operation will create 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, according to Dan Tinker, CEO of SRS Distribution.
