Social Media     

 Connect with us!
Connect with Supply House Times on Facebook, Twitter, YouTube and LinkedIn

Latest News

Aug. 24, 2007 - HD Supply Deal In Jeopardy, Price May Be Lowered By $1 Billion

August 24, 2007
/ Print / Reprints /
ShareMore
/ Text Size+

According to an online Bloomberg report, Home Depot may reduce its original $10.3 billion price tag for HD Supply by about $1 billion in order to salvage the deal.

Negotiations with private equity firms Bain Capital, Carlyle Group and Clayton Dubilier & Rice, and their banks, continued as a midnight deadline approached last night. No announcement was made at that time. According to The Associated Press, talks are still going on today.

The banks - Merrill Lynch & Co., JPMorgan Chase & Co. and Lehman Brothers Holdings - threatened to walk away from the HD Supply deal because of the slump in its business, noted Bloomberg. The worst U.S. housing market in 16 years has slowed home construction, which HD Supply counts on for revenue.

HD Supply accounted for $12.1 billion of Home Depot’s $91 billion in sales last year.

On. Aug. 9, Home Depot said it might need to cut the price of the HD Supply business; later it changed the closing date of the deal from Aug. 16 to yesterday.

“It’s unclear to me if the banks are saying they’re unwilling to lend, or unwilling to lend at a cost acceptable to the private equity guys,” Walter Todd, a principal at Greenwood Capital Associates, told Bloomberg. “Clearly there’s a lot of turmoil in the credit markets right now.”

“If the deal falls through, Home Depot can seek a termination fee from the buyers of more than $309 million under certain circumstances,” said the AP. “One such circumstance is if Home Depot terminates the agreement as a result of the buyers’ breach of its obligations to effect the closing, including a failure to obtain financing.”

The dispute is just an example of the tensions that have surfaced between private equity firms and their lenders as investors’ demands for leveraged buyout debt has weakened, Bloomberg reported.

Home Depot had planned to use the sale proceeds to help fund a stock buyback. If the sale falls through, the company may only buy back $12 billion of its shares, rather than the $22.5 billion it had originally wanted to purchase.

Did you enjoy this article? Click here to subscribe to Supply House Times.
You must login or register in order to post a comment.

Multimedia

Videos

Image Galleries

BNP Media's Plumbing Group Visits Grundfos North American Headquarters

BNP Media’s Plumbing Group, comprised of the Plumbing & Mechanical, Supply House Times, PM Engineer (pme) and Reeves Journal brands, recently visited Grundfos’ new North American headquarters building in the western Chicago suburb of Downers Grove, Ill.

5/7/13 2:00 pm CST

How To Use Your Strengths To Fight The Threat Of Amazon Supply

AVAILABLE ON DEMAND A new 8,000 lb. gorilla, Amazon Supply, has taken aim at many of the customers of PHCP supply houses. Supply House Times columnist Dick Friedman, an authority on business planning and the strategic use of inventory, warehouses and technology will present strategies and tactics for you to compete with Amazon Supply.

THE MAGAZINE

Supply House Times

March 2014

2014 March

In the March issue of Supply House Times, read about the ASA-sanctioned group Women in Industry and their goals to help promote, gain and retain women in the distribution industry. Make sure you read about the Winter PVF Roundtable and their attendance record, and read about the top products of 2013. Also read up on the latest news from the ASA, and see what will be changing at Design & Construction Week.

Table Of Contents Subscribe

Supply House Times Poll

Trade Associations

Are trade association memberships and participation beneficial to your company?
View Results Poll Archive

The Supply House Times Store

plumbing-hvac.gif
2014 National Plumbing & HVAC Estimator

Every plumbing and HVAC estimator can use the cost estimates in this practical manual!

More Products

Clear Seas Research

CS-OflRGBhomepage.jpgWith access to over one million professionals and more than 60 industry-specific publications,Clear Seas Research offers relevant insights from those who know your industry best. Let us customize a market research solution that exceeds your marketing goals.

Premier 125

Premier 125 button

The information SUPPLY HOUSE TIMES uses to rank the Premier 125 is the most accurate we can gather. It is primarily based on responses to a questionnaire we send to the wholesalers in our database, supplemented with information obtained from industry reports and estimates.

STAY CONNECTED

facebook Twitter Updated icon Youtube Updated icon    LinkedIn Updated icon