Among matters to be settled in the takeover of Orlando-based wholesale distributor Hughes Supply Inc. by Home Depot Inc. will be the home improvement
CP STAFF
Among matters to be settled in the takeover of Orlando-based wholesale distributor Hughes Supply Inc. by Home Depot Inc. will be the home improvement retailing giant’s handling of precast production assets and a concrete and masonry-centered building materials business. Atlanta-based Home Depot announced Jan. 10 that it had reached a definitive agreement with Hughes on a transaction valued at $3.47 billion.
Precast plants in Georgia, Alabama and Texas, fabricate manholes, vaults and specialty underground structures complementary to Hughes’ largest business segment, Water & Sewer. The precast operations, which Hughes acquired in the mid to late 1990s and include two American Industrial Precast plants in Texas, represent a small portion of the segment, which reported fiscal year 2005 sales of $1.22 billion.
Home Depot officials have not announced post-acquisition plans, but the precast operations would appear to be spin off targets, with prospective buyers securing sales and distribution through Hughes Water & Sewer. Perhaps more likely to be maintained is Hughes’ Building Material business, which has strong Southeast market positions in rebar fabrication, wire mesh, concrete and masonry supplies, tilt-up wall hardware, and other products for commercial and industrial building, plus public works.
Hughes Supply will be part of The Home Depot Supply, billed as the leading supplier of maintenance, repair and replacement products to owners and managers of multifamily, hospitality and commercial properties. The Hughes addition more than doubles the size of Home Depot Supply with projected 2006 combined sales approaching $12 billion. Together, the two companies will serve a $410 billion market, addressing the continuum from infrastructure and construction to maintenance, repair and remodel.
By acquiring Hughes Supply, a company with a long and established reputation for excellence and service, we continue to execute our growth strategy laid out five years ago to enhance our retail core retail, extend our business into adjacent areas and expand into new markets, said Home Depot Chairman Bob Nardelli.