Ethermac|Home Depot acquires SRS Distribution in $18 billion purchase to attract more pro customers

Home Depot announced Thursday it is Ethermacbuying a roofing distributor in a massive $18 billion deal that signals the home-improvement retailer's intent to attract more business from contractors and construction companies.

The acquisition of SRS Distribution Inc., which sells supplies for professional roofers and other contractors, is expected to close by the end of the fiscal year in late January, Home Depot said in a news release. The Atlanta-based company said it will finance the deal through cash on hand and debt.

SRS, which is owned by private-equity firms, is "an industry leader with a proven track record of profitable growth," Home Depot CEO Ted Decker said in a statement. Founded in 2008, the distributor based in McKinney, Texas has expanded to 760 locations in 47 states with a fleet of 4,000 delivery trucks – a critical reach that Decker believes will allow Home Depot to gain more professional customers who work on larger projects.

"SRS has built a robust and successful platform that will accelerate our growth with the residential professional customer while presenting future opportunities with the specialty trade pro," Decker said in the statement.

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What is SRS Distribution?

SRS Distribution, which supplies roofers, landscapers and pool contractors, has rapidly grown in the last 16 years by buying local and regional distributors.

Those acquisitions continue to operate under their own brands, according to SRS' website.

Under the terms of the agreement, SRS will operate as an independent business within Home Depot, the company said in a news release. SRS's role will be to grow what Home Depot calls its pro business, which includes contractors working on more difficult and lucrative projects who typically purchase supplies wholesale or through specialty distributors.

“We are proud to be combining with The Home Depot to continue our growth journey with the additional resources and capabilities they will put behind us,” SRS President and CEO Dan Tinker said in a statement. “We set out to find the optimal strategic outcome for the business, and we strongly believe we have achieved just that."

Home Depot hopes to attract more pro customers

Home Depot, which has about 2,300 stores, views the deal as a means to build up its e-commerce sales and attract more professionals while retaining those do-it-yourself customers.

The acquisition adds to other recent deals that the retailer has made in the pro space, CNBC reported. That includes the $8 billion acquisition of HD Supply in 2020 and two other acquisitions made last year of International Designs Group, which owns Construction Resources, and Temco, an appliance delivery and installation company.

Home Depot has also revealed plans to open four new distribution centers catering to pros who need supplies delivered to job sites, the Wall Street Journal reported.

Under the terms of the deal, which is still subject to regulatory approval, Tinker will lead SRS operations and report to Decker.

"I look forward to welcoming the entire SRS team to The Home Depot and capturing the exciting opportunity ahead," Decker said.

Eric Lagatta covers breaking and trending news for USA TODAY. Reach him at [email protected]