Latest In HD Supply

With home sales down, and with that, sales of home improvement materials, Home Depot’s timing in reinvesting the money made in part by selling off HD Supply may be raising some eyebrows. CEO Frank Blake spoke with The Wall Street Journal about the big decisions he has made and why it was important that they be made now.
 
Blake told the paper that the decision to invest more than $3 billion in company improvements over the next two years was not a difficult one to make. There’s absolutely a benefit in making changes during a downturn,”he said. “It’s easier for everyone to understand the need for the change when things are tougher and the risks are lower.”
 
Blake has already used proceeds from the HD Supply sale to implement a new centralized distribution system. …

In an interview last week with MDM, HD Supply CEO Joe DeAngelo spoke on his vision for HD Supply, post-Home Depot.
 
Speaking with DeAngelo, I came away with the feeling that HD Supply was back (if it was ever really gone) and ready to move forward as a more focused organization after the turmoil of last year: We woke up in the first part of ’07 and found out we’re for sale mid-February, and so we go with the flow with that and then find out when we’re just about sold that there is a liquidity crisis, and the deal is going back and forth. And then on top of that is a major residential downturn to contend with,” DeAngelo said.
 
Moving forward, DeAngelo told MDM that the company is finished selling off pieces of the business -“I’ll be very clear: We have no plans …

Distribution M&A markets have changed significantly in the past six months. Deals, especially in the last quarter, have started to dry up and valuations are dropping fast. Yet there is still a lot of private equity money looking for a place to land. Yesterday I had the pleasure of moderating a discussion with Brent Grover of Evergreen Consulting and Jim Miller of Supply Chain Equity Partners. These two gentlemen have complementary perspectives with strong distribution expertise, but they did not bear much good news.  
 
We clearly are on the back side of the peak of valuations. With tighter debt markets, financial buyers won’t be driving the market the way they have the past few years, but they will be a factor, Miller noted. His take is that there will still be add-on …

BusinessWeek just ran a couple of articles on Clayton, Dubilier & Rice, the private equity firm that joined with Bain Capital and the Carlyle Group to buy HD Supply. Due to a tightening in the credit markets, the trio will pay $8.5 billion instead of the original $10.3 billion price for the Home Depot wholesale unit.
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The first BW article was aptly titled, Private Equity’s White-Knuckle Deal,” and the other focuses on CD & R’s chairman Joseph L. Rice III, 75, who discusses how his firm years ago fell into the trap of buying into industries it did not understand and “embraced debt too enthusiastically.” (Read article)
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“White-Knuckle Deal” recounts in …