Overview
Acquirer: Home Depot (NYSE: HD)
Founded: February 6, 1978 (Marietta, GA)
CEO: Ted Decker
Employees: 470,100
Market Cap: $370.28B
Target: Gypsum Management Services (NYSE: GMS)
Founded: 1971 (Tucker, GA)
CEO: John Turner Jr.
Employees: 7,113
Market Cap: $4.14B
Total Transaction Value: $4.3B
On June 30, 2025, Home Depot, the world’s largest home improvement retailer, won a bidding war, announcing the acquisition of building-products distributor GMS. Specifically, its specialty trade distribution subsidiary, SRS Distribution Inc., is set to acquire GMS Inc. This will accelerate SRS’s vision of becoming a leading, multi-category building materials distributor, adding a new vertical that is adjacent to its existing business.
The Home Depot is the world’s largest home improvement specialty retailer. The company operates more the 2,350 retail stores and over 800 branches across all 50 states. The company is also a large employer, closing in on half a million employees. SRS Distribution has grown to become one of the fastest-growing building products distributors in the U.S. Since its inception, it has established a strong growth strategy and entrepreneurial culture focused on serving customers, partnering with suppliers, and attracting top talent.
GMS operates a network of more than 300 distribution centers with an extensive product offering. In addition, it operates nearly 100 tool sales and rental service centers providing solutions for a residential and commercial contractor customer base across the U.S and Canada. Its unique operating models combine the benefits of a national platform and strategy with a local go-to focus, maintaining economies of scale and customer service capabilities.
This strategic acquisition is aimed at growth across the U.S and in neighboring Canada. This will allow for cross-selling of new products and services in all locations. This advances Home Depot’s SRS program, driving operational efficiency and customer value proposition.
"The combination of GMS and SRS will provide the residential and commercial Pro customer with more fulfillment and service options than ever before. Together, we'll create a network of more than 1,200 locations and a fleet of more than 8,000 trucks capable of making tens of thousands of jobsite deliveries per day. GMS is an industry leader with a proven track record of growth, and we look forward to welcoming the entire GMS team to SRS and capturing the exciting opportunity ahead." (Dan Tinker, CEO of SRS)
Integration Outlook
Short-Term:
In the short term, Home Depot’s acquisition of GMS, a key distributor of building materials, is expected to strengthen its Pro segment by expanding its product offerings and regional reach. The deal will allow Home Depot to directly serve residential and commercial contractors, accelerating growth in the construction and remodeling markets. Early integration efforts will likely focus on aligning supply chains, consolidating distribution capabilities, and introducing GMS’s product mix into Home Depot’s broader ecosystem.
Execution will be important in the following months, as Home Depot looks to maintain GMS’s established contractor relationships while leveraging its own scale in logistics and merchandising. Investors will closely watch how quickly Home Depot can integrate operations without disrupting ongoing projects or losing GMS’s core customer base. Short-term financial results may reflect integration costs, but management expects the acquisition to be modestly accretive to earnings within the first full year.
The home-improvement company will purchase all outstanding shares of GMS’s common stock for $110 apiece. The buy represents a 36% premium to GMS’s unaffected share price as of June 18, GMS said Monday. Shares of GMS jumped 11%, to $108.25, in premarket trading. Through Friday’s close, the stock is up nearly 25% in the past year.
Long-Term:
Long-term, this acquisition positions Home Depot to capture a larger share of the professional contractor market, an area of strategic growth for the company. By combining Home Depot’s national presence with GMS’s distribution network and SRS’s building products expertise, the company could build a vertically integrated platform serving both large-scale contractors and independent builders. Over time, this platform could provide a one-stop shop for building materials, enhancing customer loyalty, and recurring sales.
If successful, Home Depot could solidify its leadership in the Pro segment and better withstand fluctuations in consumer home improvement spending. Expansion into new geographic markets and product diversification can fuel steady revenue growth beyond its traditional DIY base. However, long-term success will depend on the company's ability to maintain service quality, competitive pricing, and operational efficiency across a larger and more complex business model.
Risks and Uncertainties:
One key risk in the short term is the complexity of integrating distribution operations with Home Depot’s retail focus. Cultural differences between wholesale and retail operations, with potential overlap in supplier relationships, may create challenges. Additionally, the pro-construction market is very cyclical and sensitive to rates, housing, and broader economic conditions. This can create volatility in performance.
Longer-term uncertainties include the risk of competition. Rivals such as Lowe’s and independent distributors may aim to strengthen their offerings. There is also the possibility that expected synergies take longer than expected or fall short of projections. Regulatory scrutiny around market concentration in the building materials space could evolve if Home Depot continues to expand. Overall, maintaining a strong service reputation while scaling a complex business is crucial to sustainable growth.