HD Supply Deal Trimmed by $1.8b

Jason Sandefur

Crippled by the credit market shakeup on Wall Street, Home Depot was forced to discount the sale of its wholesale distribution division, HD Supply, by $1.8 billion, the New York Times reports.
Home Depot has reached a tentative $8.5 billion deal to sell HD Supply — which includes Crown Bolt, Brampton Fastener (Brafasco) and Western Fasteners — to three private equity firms. The same transaction was valued at $10.3 billion in June.
“Home Depot was forced back to the negotiating table after the investment banks financing the deal threatened to back out,” according to the Times.
The banks reportedly required the private equity firms to boost their asset contribution to $800 million each, while getting Home Depot to agree to finance about $1 billion of the purchase price.
HD Supply has nearly 1,000 locations in the U.S and Canada with more than 26,000 employees. The division sells to the infrastructure, construction and maintenance supply industries. HD Supply reported revenue of $12.1 billion in 2006, about 13% of overall Home Depot sales. The company launched the supply business in 1997 and expanded it by paying $3.2 billion for Hughes Supply in 2006. Web: hdsupplyinc.com and homedepot.com �2007 FastenerNews.com