HD confirms drop in Supply unit price

ATLANTA The Home Depot announced today that it has amended the purchase and sale agreement for HD Supply to an acquisition corporation formed by affiliates of Bain Capital Partners, The Carlyle Group and Clayton, Dubilier & Rice. The company confirmed reports that the purchase price of the Supply unit would be reduced to $8.5 billion. The company also said that it would purchase a 12.5% equity interest for $325 million.

In connection with the amendment, Merrill Lynch, JP Morgan and Lehman Brothers provided to the private equity consortium revised debt commitment letters for 100% of the third party debt financing. The closing will take place on Aug. 30. After giving consideration for the equity investment and expenses associated with the transaction, the company expects to net approximately $7.9 billion in cash proceeds from the sale.

"Despite the softness in the financing and residential construction markets, the terms of the HD Supply sale deliver shareholder value today and in the future as we will share in HD Supply's upside potential. We are now focused on our retail business," said Frank Blake, chairman and ceo of The Home Depot.

According to Home Depot, the sale of HD supply is not expected to have a material impact on the company's 2007 financial results.