In an effort to extend its market reach into the pro contractor market, The Home Depot announced on May 6 plans to acquire Costa Mesa, Calif.–based White Cap Construction Supply, bringing the Atlanta-based home improvement retailer an immediate and established presence in the pro tool and hardware distribution arena. Established in 1976, White Cap had 2003 gross sales of $495 million from 71 locations, primarily on the West Coast. The company offers a wide array of more than 65,000 in-stock products, including construction materials, hand tools, fasteners, safety equipment, power tools and equipment, and work wear.
According to Frank Blake, Home Depot executive vice president of business development, The Home Depot was attracted to White Cap because of the distributor's leadership position in the industry and because its customers and product lines complement The Home Depot's existing retail business. “We remain committed to finding new business opportunities for The Home Depot, and this acquisition adds new customer channels and product selling opportunities,” Blake said in a press release announcing the deal. “White Cap represents another step in offering professional customers products and services for the entire construction process.”
The Home Depot plans to retain the White Cap name as it incorporates the distributor into its The Home Depot Supply division. The division is charged with focusing on the retailer's planned growth strategy to fulfill professional customer needs by offering products and services to home builders, facility maintenance professionals, construction contractors, and landscape professionals—a market that The Home Depot estimates to be worth $410 billion.
“White Cap is the clear leader in this highly fragmented market, and we're pleased that its leadership team will continue to play an integral role in the organization,” said The Home Depot Supply division president Jim Stoddart in a statement. “We believe this acquisition will be accretive to earnings, and we are most excited about the opportunity it provides for future growth. White Cap's expertise will help The Home Depot Supply more fully satisfy its customers' needs.”
At press time, White Cap officials were unavailable for comment.
The acquisition agreement was expected to become final by June 6. Financial terms were not disclosed.