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The Home Depot, Atlanta, GA, has entered into an agreement to acquire White Cap Construction Supply, Inc., Costa Mesa, CA, a $500-million distributor of specialty hardware, tools and materials targeting large- and medium-sized construction contractors. It expands on the $64-billion retailer's strategy to expand its professional customer market base. White Cap will become part of The Home Depot Supply division.
The Home Depot Supply is part of the company's planned strategy to serve homebuilders, facility maintenance professionals, construction contractors and landscape professionals. The total professional contractor market is estimated to be a $410 billion opportunity. Founded in 1976, White Cap's estimated annual sales are $500 million out of 70 branches in 17 states from the West Coast to Toledo, OH, and south into Georgia.
The company has 1,720 employees. Approximately 60 percent of White Cap's sales are delivered to the job site, while the remaining 40 percent are purchased at branch locations. The company offers 65,000 in-stock products including brand-name construction materials, hand tools, fasteners, safety equipment, power tools and equipment, work wear and landscape lighting. The agreement is anticipated to close in the next 30 days.
About White Cap
Founded in 1976 with one store in Santa Ana, CA, White Cap's objective from the start was to create a destination where professional contractors of all sizes could find all the products they need. It has a combined sales force of 450, and carries $70 million in inventory.
Its mission is to be the premier nationwide supplier of hardware, tools, and materials to the professional contractor market by making it easier for its customers to do business through the combination of the best service, product selection and price. It has made 16 acquisitions in the past seven years in addition to green-field store openings.
HD's History in Distribution Markets
The Home Depot made its formal entrance into industrial and commercial markets with a 1,000-page, 15,000-item catalog called the Pro Book in 1996. It created its first Pro Store in 1997 next to a regular Home Depot outlet in California to provide better service levels. The Home Depot Supply is now a division with five retail locations in California, Arizona, Texas and Colorado. These stores average 80,000-100,000 sq. ft. and carry around 13,000 products, including job-lot quantities of professional grade building materials and supplies.
HD bought Maintenance Warehouse/America Corp. in 1996, San Diego, CA, a $30-million direct-mail marketer to the apartment building maintenance market. It continues to operate that and last year transitioned the Maintenance Warehouse name over to HD Supply.
Apex Supply, Atlanta, GA, was acquired by HD in early 2000. Apex is a Southeast regional plumbing supplies and HVAC distributor, and at the time of the deal had 21 locations in Georgia, Tennessee and South Carolina with 525 employees. It is the largest independent distributor of Trane products. Apex has also been rolled into the Home Depot Supply division.
'We remain committed to finding new business opportunities for The Home Depot, and this acquisition adds new customer channels and product selling opportunities,' said Frank Blake, executive vice president ' business development, The Home Depot. 'We were attracted to White Cap because of its leadership position in the industry, and because its customers and product lines complement our existing retail business. White Cap represents another step in offering professional customers products and services for the entire construction process.'
'White Cap is the clear leader in this highly fragmented market, and we're pleased that its leadership team will