In its biggest acquisition ever for its Home Depot Supply Division, The Home Depot, the nation's largest home retailer, agreed to acquire Hughes Supply Inc. for about $3.2 billion.
Speculation that Home Depot would buy Hughes Supply began to surface again when Hughes Supply announced in the late fall that it was looking at strategic alternatives to maximize shareholder value. Hughes Supply had been rumored to be a Home Depot takeover target for years.
The Home Depot Supply division has built a position in a range of markets serving business-to-business customers, such as home builders, professional contractors, municipalities and maintenance professionals. The purchase of Hughes Supply more than doubles the size of The Home Depot Supply, with projected 2006 combined sales approaching $12 billion, the two companies said. Together, the two companies will serve a $410 billion market, supplying products for infrastructure, construction, maintenance, repair and remodel applications.
Founded in 1978, The Home Depot had fiscal 2004 sales of $73.1 billion. The company employs approximately 325,000 associates and has 2,012 stores in all 50 states, the District of Columbia, Puerto Rico, 10 Canadian provinces and Mexico. The company has announced plans for retail expansion into China.
Hughes made more than $123 million last year on sales of $4.42 billion. The company's electrical division ranked eighth on Electrical Wholesaling's Top 200 electrical distributors listing in 2005. The electrical business accounted for about 10 percent of Hughes' 2005 overall sales.