Home Depot Inc., the home-improvement retail giant, is set to enhance its Pro division.
In Home Depot's news release, the company has agreed to buy Interline Brands Inc., a leading national distributor and direct marketer of broad-line maintenance, repair and operations (MRO) products, for about $1.63 billion in cash.
The acquisition will bolster Home Depot's Pro division offerings, a division that is catered to professional contractors and builders.
Craig Menear, chairman, CEO and president of Home Depot said in the news release that it is a "top priority" to "address the needs of their Pro customers."
"Interline is a well-run company that has achieved impressive financial results over the last few years. With their seasoned leadership team, we will enhance our ability to serve the Pro - both in the store and at any desired location outside of the store - driving significant value for our customers and shareholders," he said.
Interline provides Home Depot with an extensive distribution network of more than 90 locations throughout the U.S., Canada and Puerto Rico and fulfillment capabilities in the residential MRO market.
Bloomberg also reports that the move reflects the demand for large projects that require contractor help, as purchases of more than $900 rose 6.8 percent at Home Depot in the first quarter of the year. It is more than twice as big as the 3.2 percent growth for items of less than $50.
Michael Grebe, chairman and CEO of Interline, is excited of the acquisition.
"We're thrilled for our customers and employees that Interline Brands and The Home Depot have agreed to join forces," he said in the news release. "We're confident they all will benefit from this next exciting stage in our company's history."
Home Depot assigned Bill Lennie, head of its operation in Canada, as executive vice president Outside Sales and Service. It is a new position created to integrate Interline into the company as well as lead Home Depot's Pro, MRO and installation services business.
Lennie will still continue to head Home Depot's Canada operations until a successor is appointed, as stated in the news release.
Home Depot said that the deal is expected to be completed during the third quarter, which ends on Nov. 1 and will add to Home Depot's earnings during the fiscal year.
