In a significant move to better serve its “pro” customers, the Home Depot announced last week it will acquire acquire SRS Distribution in an $18.25 billion deal, and the news was met with mixed feelings by the industry.

Home Depot said the move will increase its market by about $50 billion to roughly $1 trillion, and indicated SRS Distribution will operate as an independent company. The announcement sent ripples through the construction and distribution industry, making headlines in some of the biggest news outlets and drawing a litany of reactions and observations.

Home Depot has viewed the acquisition as a major investment into its “pro” customers and market. With SRS, Home Depot believes it can better support customers like roofing contractors who do more complex projects and order specialty products wholesale or in bulk to complete their jobs.

“We are honored to be combining with The Home Depot,” Dan Tinker, SRS Distribution president and CEO, posted on his personal LinkedIn page. “It is a testament to all the hard work, dedication, and commitment of our 11,000 amazing team members. We are just getting warmed up!”

The company will add SRS' network of more than 2,500 professional sales forces in more than 760 locations to its footprint of more than 2,000 U.S. stores and distribution centers.

News of the acquisition came roughly a week after Home Depot announced it is opening four new distribution centers in Detroit, Los Angeles, San Antonio and Toronto in the coming year. The new distribution centers will stock large, bulky merchandise like lumber, insulation and roofing shingles.

"Over the last several years, we have been investing to deliver a faster, more convenient, differentiated experience for our pros,” said Chip Devine, senior vice president of outside sales for The Home Depot, in a written statement. “Our distribution network is one piece of the comprehensive pro ecosystem we're building to better meet the needs of this important customer."

Customers, Distributors React

Reactions online from industry professionals ranged from excitement to cynicism. Uzziel Jaramillio, a roofing contractor, commented on Facebook that “When the [tide] rises, all ships float! Very good indicator.”

Jackson Ballman, project estimator with Porter Roofing Contractors, shared the news on social media with the comment “Roofing just got Walmarted.” 

On LinkedIn, Gary Murphy Jr., CEO at ARS Building Products, commented that SRS’ success is in part due to acquiring independent distributors and suspects “some of that will be lost now, in part because of how HD [Home Depot] does business.”

“Happy for the guys that will see the reward and to see what they do next. With that being said, not thinking it will be great for contractors. Both SRS and HD mentioned tech in their press releases. While SRS has brought excellent tech to the industry, HD’s is culture killing - think orange aprons and self-checkout lanes,” Murphy Jr. said.

Other distributors, such as representatives of the NEMEON network, were taking a wait-and-see approach to how the acquisition will affect the industry.

“The purchase of SRS by Home Depot will create opportunities for all in the pro segment of our industry,” said NEMEON President and CEO David O’Donnell.

Curt Gomes, executive director of the Independent Distributor Alliance Corporation, also shared similar sentiments, telling Roofing Contractor that the acquisition's impact remains uncertain.

"That said, independent distributors maintain a distinct advantage due to our close relationships with customers, ensuring tailored solutions and unwavering support,” said Gomes.

The acquisition is expected to be completed by the end of 2024 through a mix of cash and debt.