Edited from Bloomberg.com and Hughessupply.com
Home-improvement retailer Home Depot, Inc., agreed to buy MRO and construction distributor, Hughes Supply, Inc. for about $3.19 billion.
Holders of Hughes Supply will receive $46.50 a share, 21% more than yesterday's closing stock price. The company, a seller of construction materials and products, had $4.42 billion in sales in the last fiscal year and operates more than 500 stores in 40 states, Atlanta-based Home Depot said in a statement today.
The purchase is Home Depot's biggest ever and will double the size of its supply division to $12 billion in revenue. Chief Executive Officer Robert Nardelli has made three acquisitions in the past year to expand beyond do-it-yourselfers.
``They're doing the right things and getting in the right areas,'' said Marvin Roffman of Roffman Miller Associates in Philadelphia, which owns 125,000 Home Depot shares among $370 million in assets. ``The professional builder market is a $400 billion-plus market. When you're the second-largest retailer, if you want to continue to grow you have to continue to go after really large targets.''
Shares of Home Depot rose 44 cents to $40.82 yesterday in New York Stock Exchange composite trading. Hughes gained 42 cents to $38.55. Home Depot shares fell 5.3 percent last year.