Home Depot Inc., the largest home-improvement retailer, agreed to buy Interline Brands Inc. for about $1.63 billion in cash to bolster its offerings for professional contractors.
The acquisition is expected to be completed in the quarter that ends Nov. 1 and will add to earnings in the current fiscal year, Atlanta-based Home Depot said Wednesday in a statement.
Home Depot has curtailed store openings since the housing crash and focused on new avenues of growth, such as online sales and installation services. Buying Interline would be a major boost to Home Depot’s efforts to sell more supplies to customers in the building and maintenance professions. The Jacksonville, Florida-based company markets and distributes products including Barnett pro contractor supplies and Wilmar janitorial equipment through 90 locations in the U.S., Canada and Puerto Rico.
In another sign that Home Depot is pushing heavily into the professional-contractor market, the retailer said Wednesday that Bill Lennie, head of its Canadian operations, will assume the newly created position of executive vice president Outside Sales and Service. Lennie will be in charge of the company’s professional, installation-services and maintenance and repair businesses, which will include Interline.
After more than three years of housing-price gains, homeowners have become more willing to take on large projects that require help from a contractor. Purchases of more than $900 rose 6.8 percent at Home Depot in the first quarter. That’s more than twice as fast as the 3.2 percent growth for tickets of less $50. Same-store sales of products geared toward professionals, such as siding, power tools and commercial lighting, rose more than 10 percent in the period.
Home Depot rose 0.9 percent to $114.90 at the close in New York. The shares have gained 9.5 percent this year, while rival Lowe’s Cos. has declined 2 percent.