HD Supply selling White Cap for $2.9 billion

HD Supply Holdings has entered into an agreement to sell its construction and Industrial “White Cap” business segment to an affiliate of Clayton, Dubilier & Rice for a purchase price of $2.9 billion in cash. 

White Cap has a focus on distributing specialty concrete and construction products and services contractors in North America. 

Proceeds from the sales are expected to be $2.5 billion after taxes and transaction costs. HD Supply said it expects the deal to close in October 2020.

"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 and 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."

Once the deal is completed, John Stegeman, White Cap’s CEO, and Alan Sollenberger, White Cap’s president, are expected to continue to lead the construction and industrial business, which will include the White Cap, Home Improvement Solutions and Brafasco businesses. 

HD Supply operates 270 branches and 44 distribution centers in the U.S. and Canada. The Atlanta-based company had sales of $6.1 billion in 2019.

In March, the rise of the COVID-19 crisis forced HD Supply put plans on hold that would have seen the company separate its facilities maintenance business from the construction and industrial division into two independent businesses.

Clayton, Dubilier & Rice is a private investment firm with offices in New York and London.