Home Depot to Buy Hughes Supply
After months of speculation, The Home Depot announced it would pay $3.2 billion for industrial distributor Hughes Supply Inc., Orlando, FL, and assume $285 million in net debt. The purchase price is around 12X EBITDA. The addition of Hughes Supply more than doubles the size of The Home Depot Supply Division with projected 2006 combined sales approaching $12 billion.
The move by Home Depot pushes the big-box retailer further into traditional industrial wholesale markets.
"It just tells us that Home Depot is really highly motivated to get into the industrial distribution market," said David Manthey, senior distribution analyst who follows Hughes for Robert W. Baird & Company Inc., Milwaukee, WI. "Hughes was the only cornerstone property that was out ...