HD News & Events

Jefferies says the announced acquisition of Mingledorff's expands Home Depot's and SRS Distribution's aggregate TAM by $100B and provides a solid foundation for future growth in the HVAC distribution vertical. The firm continues to believe Home Depot's consolidation of the building products distribution landscape will support long-term earnings power. Jefferies reiterates a Buy rating on the shares.

Shares of Watsco (WSO) are underperforming on Tuesday on competition concerns after Home Depot (HD) announced that its SRS Distribution unit had agreed to acquire Mingledorff's for an undisclosed amount. The latter is a wholesale distributor of heating, ventilation and air conditioning Equipment, Parts and supplies. Watsco shares are down roughly 10% to $347.46 in morning trading.

Home Depot subsidiary SRS Distribution has entered into a definitive agreement to acquire Mingledorff's, a wholesale distributor of heating, ventilation and air conditioning, or HVAC, equipment, parts and supplies, serving residential and commercial customers through 42 locations in five states across the southeastern U.S. CEO David Kesterton, as well as his senior leadership team, will continue to lead Mingledorff's as part of the SRS organization. The closing of the acquisition is subject to customary closing conditions, including regulatory approvals, and is expected to be completed during Q2. The transaction is expected to be funded through cash on hand and debt. The company does not expect this acquisition to impact the return to its target 2.0x leverage ratio, which is anticipated to occur by the end of Q2 of FY27. Financial terms of the transaction were not disclosed.