Home Depot sells Supply Unit

ATLANTA Home Depot made good on its pledge to explore the sale of its HD Supply Unit with the June 19 sale of the division to three private equity firms for $10.3 billion. The group included Bain Capital, The Carlyle Group and Clayton, Dubilier & Rice and the deal is expected to close this fall.

Home Depot ceo Frank Blake, who’s talked about the possible sale of HD Supply since early February, described the move as part of a larger effort to “enhance shareholder value through an exclusive focus on our retail business and the return of cash to our shareholders.”

The HD Supply unit, which focused on the needs of contractors and other building professionals, grew rapidly the past few years through acquisitions that included the $3.2 billion purchase of Hughes Supply in 2006.  The unit generated more than $12 billion in sales last year but a sharp downturn in the housing market and the departure of former ceo Bob Nardelli shifted the chain’s focus to a back-to-basics approach that made HD Supply expendable. That renewed focus on basic retail stores also resulted in the closing of its Floor Store call center and seven stores in March.