HD Supply (NASDAQ: HDS), Atlanta, GA, has entered an agreement to sell its Waterworks business unit, the nation's largest distributor of water, sewer, storm and fire protection products, to Clayton, Dubilier & Rice for a purchase price of $2.5 billion in cash.  The transaction is expected to close in HD Supply's third fiscal quarter of 2017 subject to customary regulatory approvals.

"After a detailed evaluation, we determined that a sale of our Waterworks business unit to Clayton, Dubilier & Rice is in the best interests of our Waterworks associates and HD Supply stockholders," said Joe DeAngelo, HD Supply Chairman, president and CEO. "This significant strategic transaction will further simplify and focus HD Supply on our highest value creation opportunities, accelerate debt reduction, create additional cash to enable next generation growth investments and innovation as well as return cash to HD Supply stockholders."

HD Supply Holdings Inc. also reported sales for the fiscal first quarter ended April 30 of $1.9 billion, an increase of 5.1 percent year-over-year. The company reported a profit for the quarter of $85 million, compared to a loss of $14 million in the first quarter the previous year.

First-quarter sales for facilities maintenance were up 0.7 percent year-over-year to $682 million, Waterworks sales were up 8.6 percent to $657 million and Construction & Industrial sales increased 7 percent to $536 million.