Home Depot Acquisition of GMS Boosts Pro Market Reach with $5.5 Billion Deal

The Home Depot has finalized its acquisition of GMS Inc. for approximately $5.5 billion, including net debt, through its specialty distribution subsidiary, SRS Distribution Inc. GMS, known as a major distributor of specialty building products such as drywall, ceilings, and steel framing, was initially announced as an acquisition target on June 30, 2025. This strategic purchase is set to enhance SRS's standing as a substantial multi-category building materials distributor, enriching its capabilities with complementary products and customer relationships.

Ted Decker, Chair, President, and CEO of The Home Depot, expressed that the integration of GMS would significantly advance their ability to offer more comprehensive solutions to professional contractors, often referred to as "Pros." The aim is for SRS and GMS to create synergy through cross-selling opportunities and an expanded product range, strengthening Home Depot’s engagement with both residential and commercial pro markets.

The acquisition process involved a tender offer for all outstanding shares of GMS stock, culminating in a successful tender of approximately 79.5% of shares. The transaction was conducted at a cash purchase price of $110 per share. After fulfilling all necessary conditions, Home Depot completed the merger, making GMS a direct subsidiary of SRS and indirectly wholly owned by The Home Depot.

Recently, Home Depot cleared the final regulatory hurdle in the acquisition process, securing clearance from the Canadian Competition Bureau. This regulatory clearance has been pivotal in advancing the merger, allowing The Home Depot to fully leverage GMS's significant market presence and distribution capabilities.

The acquisition reflects Home Depot's strategy to expand its offerings to the professional contractor market. By integrating GMS’s 400 facilities with SRS’s existing operations, the combined entity now boasts over 1,200 facilities and a fleet of 8,000 trucks, ensuring same-day delivery solutions for contractors. This expansion aims to meet the rising demand for efficient, one-stop solutions from professional builders, positioning Home Depot to capture a greater share of a growing market.

The substantial premium paid for GMS indicates Home Depot’s focus on strategic market expansion, targeting increased revenue growth through enhanced logistics and cross-selling opportunities. The competitive landscape, however, presents challenges with potential margin pressures due to rising material costs and tariffs, particularly affecting imported inputs. Nonetheless, Home Depot’s robust domestic supply network is expected to mitigate some of these risks.

Overall, the strategic acquisition of GMS underscores Home Depot’s commitment to bolstering its pro market presence and enhancing its supply chain capabilities, aiming for sustained growth and competitiveness in an evolving construction industry.