The 2020 Mid-Year Economic Update_long

Home Depot Buys Cox Lumber, Enerbank

Home Depot Supply Aims for $23-$27B by 2010
The Home Depot to Buy Hughes Supply for $3.4B
The Home Depot to Acquire National Waterworks
Home Depot Subsidiary White Cap Acquires Greenwald Supply
The Home Depot to Acquire White Cap


Cox Lumber
Home Depot Supply has expanded its presence on the East Coast with subsidiary Williams Bros. Lumber’s recent purchase of Florida-based Cox Lumber. Cox had $396 million in sales in 2005. The acquisition will almost double the size of Williams Bros., based in Suwannee, GA, and extend its reach into key growth markets in Florida and the Southeast.


The acquisition of Cox Lumber is part of The Home Depot’s strategy to grow in what it estimates to be a $410 billion professional supply market. Home Depot Supply serves business-to-business customers, including homebuilders, professional contractors, municipalities and maintenance professionals.


Cox Lumber has 28 stores, 11 truss plants and 15 door plants. It has also recently started installing products including garage doors, windows, interior and exterior millwork, siding, and soffit and fascia.


Linton N. Tibbetts bought Cox Lumber Co. in 1949; in the beginning, the company had three employees (including Tibbetts), one truck and a 1000-square-foot showroom. The company now has more than 28 locations. Cox has grown from roughly $50 million in 1985 to the $396 million annual sales today. The distributor more than doubled its revenues in the past 10 years.


The 82-year-old Tibbetts told the St. Petersburg Times that it was time to sell the company; he noted there were at least 16 significant independent lumber yards in the area at Cox’s peak. Tibbetts guessed his company was one of the only remaining independent building materials distributors in that region.


Other major acquisitions HD has made in building materials and lumber include White Cap Construction Supply Inc. (at least $500 million in annual sales), Costa Mesa, CA, and Williams Bros. Lumber (at least $400 million in annual sales). Williams Bros. focuses primarily on the metro Atlanta and coastal Georgia markets.


White Cap, purchased in 2004, targets large- and medium-sized construction contractors. White Cap has 100 branches in 23 states with 430 sales representatives. It stocks construction materials, hand tools, fasteners, safety equipment, power tools and equipment, work wear, concrete forms and supplies and landscape lighting.


Home Depot also expanded its reach into construction supply markets with this year’s purchase of Hughes Supply.


EnerBank USA
The Home Depot agreed to acquire EnerBank USA from CMS Energy. EnerBank provides home improvement loans, which remodeling and trade contractors can offer their customers. It provides loans for a variety of projects, including window and door replacements, heating and air conditioning upgrades, kitchen and bath remodeling, roofing, painting and landscaping work.


“This acquisition is another part of our strategy to expand our business and relationships with professional customers,” said Frank Blake, executive vice president of business development and corporate operations for The Home Depot. “EnerBank has a unique way of helping home improvement contractors grow their business, especially the smaller contractors who frequent our retail stores. EnerBank’s focus on offering loans via contractor referrals complements our existing credit offerings and partnerships.”


When contractors want to close a home improvement deal with a potential client, they tell the client to call EnerBank to gain approval for a loan. The loan starts when the homeowner is satisfied with the work and endorses an EnerBank check to the contractor. EnerBank operates no branches.


“This acquisition gives us the opportunity to offer our services to The Home Depot’s large contractor customer base,” said Louise Kelly, CEO of EnerBank.


At the end of fiscal 2005, EnerBank had net loan assets of $76 million.


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