HD Supply Holdings Inc. (NASDAQ:HDS), Atlanta, on Tuesday announced that it has entered into a definitive agreement to sell its Construction & Industrial – White Cap business to an affiliate of private equity firm Clayton, Dubilier & Rice for $2.9 billion.

Net proceeds from the sale are expected to be approximately $2.5 billion after taxes and transaction costs. The transaction is expected to close in October 2020, subject to customary regulatory approvals.

“After a detailed evaluation, we determined that a sale of our White Cap business unit to Clayton, Dubilier & Rice is in the best interests of our HD Supply stockholders,” said Joe DeAngelo, HD Supply chairman, president & CEO. “This transaction will enable the HD Supply leadership team to intensify our focus on Facilities Maintenance, while also returning capital to our HD Supply shareholders.”

HD Supply expects to use the net proceeds from this transaction to return capital to HD Supply shareholders, fund M&A activity and repay debt. A more detailed discussion around the use of proceeds will take place on our second-quarter earnings call in early September.

Once the transaction is complete, John Stegeman, White Cap’s current CEO, and Alan Sollenberger, White Cap’s current President, are expected to continue to lead the Construction and Industrial business, which will include the White Cap, Home Improvement Solutions and Brafasco businesses.