Residence Depot on Thursday stated it’s buying SRS Distribution in a $18.25 billion deal, the most recent and largest signal of its ambitions to drive gross sales by successful extra enterprise from contractors, roofers and different house professionals.

The house enchancment retailer expects the deal to shut this fiscal 12 months, which ends in late January. It stated it is going to finance the deal by way of money available and debt.

Residence Depot already attracts half of its enterprise from execs, whereas the opposite half comes from do-it-yourself clients. With the deal, the Atlanta-based firm is making yet one more push to achieve clients who sort out complicated and profitable initiatives. That was one of many priorities that Residence Depot leaders laid out for this 12 months. It is also why the corporate has been opening a rising community of distribution facilities that may inventory giant portions of things that execs want, comparable to lumber or shingles, and ship them on to a job web site.

The acquisition is the most important in Residence Depot’s historical past. In an interview with CNBC, CEO Ted Decker described the deal as “a complementary accelerator” to its efforts to draw extra execs. He stated the deal will increase Residence Depot’s whole addressable market by $50 billion.

SRS Distribution sells provides to professionals within the landscaping, pool and roofing companies. The McKinney, Texas-based firm has roughly 11,000 workers and 760 branches throughout 47 states. It additionally has a fleet of 4,000 supply vehicles and a devoted salesforce that caters to the house execs, Decker stated.

Residence Depot has leaned into the professional enterprise as its development stagnates. The retailer, a serious beneficiary of pandemic traits, has handled moderating gross sales as customers tackle fewer house initiatives and spend extra on grocery payments and experiences. Over the previous few quarters, clients have purchased fewer big-ticket gadgets and tackled smaller, much less expensive initiatives. 

Decker stated final month on an earnings name that Residence Depot would concentrate on opening new shops, attracting extra professional gross sales and making an attempt to make clients’ buying expertise extra seamless.

To drive development, the corporate is opening new shops and making an attempt to attract extra enterprise from house professionals, comparable to contractors that oversee remodels and different main initiatives. Residence Depot plans to open a dozen new shops through the fiscal 12 months. It not too long ago introduced it is going to open 4 distribution facilities that cater to execs. 

The acquisition comes after the house enchancment retailer stated final month that it expects slower gross sales traits to proceed. It stated it anticipates whole gross sales for the complete 12 months will develop about 1%, together with an extra week within the fiscal 12 months. But it expects comparable gross sales, which take out the impact of retailer openings and closures and don’t embody the extra week, to drop by about 1%.

Residence Depot had a complete of two,335 shops throughout the U.S, Mexico and Canada as of the top of the fiscal 12 months in late January. It has about 465,000 workers. 

As of Wednesday’s shut, shares of Residence Depot are up about 11% this 12 months. That is barely forward of the ten% features of the S&P 500. Residence Depot’s inventory closed at $385.89 on Wednesday, bringing its market worth to about $382 billion.

That is breaking information. Please examine again for updates.