HD Supply is suddenly half the company it once was. Literally.
Eleven weeks after the industrial distributor announced it would sell its Construction & Supply – White Cap business unit to private firm Clayton, Dubilier & Rice, newly-formed White Cap Supply Holdings and Construction Supply Group (CSG) co-announced Monday that White Cap has been successfully separated from HD Supply and combined with CSG.
That combination creates what CD&R calls the leading North American distributor of a diverse mix of concrete accessories and specialty construction and safety products with annual revenues of more than $4 billion. White Cap and CSG said the transaction is also valued at approximately $4 billion, while CD&R purchased White Cap from HD Supply for $2.9 billion.
CD&R now holds 65 percent ownership in the combined company, with previous CSG shareholders holding 35 percent ownership.
“Both White Cap and CSG share the same vision of continuous growth with the goal to relentlessly improve customer service,” said John Stegeman, CEO of White Cap. “By joining together, our platform allows expansion of our product and service offerings across more than 400 locations in 46 US States and 8 Canadian Provinces. Our goal is to provide even greater value for our customers and enhance our ability to serve with excellence. This is an incredibly exciting time for our associates, customers, and suppliers.”
The combined White Cap and CSG has an outside sales force of more than 850 associates; more than 1,000 inside and counter sales associates; nearly 2,000 delivery vehicles; and an offering of 400,000+ products from 4,500+ suppliers.
For HD Supply, it means the company goes from a $6.15 billion revenue distributor with equal focus on MRO supplies and construction supplies and to one closer to the $3 billion mark that focuses on MRO. Both HD’s Facilities Maintenance and C&I White Cap business units had 2019 sales of approximately $3 billion.
HD Supply was No. 4 on Industrial Distribution’s 2020 Big 50 List. If factored into this year’s list, the divestment would place the Atlanta, GA-based company at the No. 10 spot.
The divestment completion finalizes a more than year-long period of transition for HD Supply. In September 2019, it originally announced a plan to separate White Cap and its Facilities Maintenance business into two independent, equally-sized businesses, expecting to complete the move by the middle of the company’s fiscal 2020. The COVID-19 pandemic caused HD to defer that separation, though the company said March 30 that it was committed to it.