Summary
The Home Depot, Inc. announced on June 19, 2007, a significant divestiture through a definitive agreement to sell HD Supply, Inc. and CND Holdings, Inc., along with related intellectual property, to an affiliate of Clayton Dubilier & Rice, Carlyle Group, and Bain Capital. This transaction is valued at an aggregate purchase price of $10.325 billion and is structured on a debt-free, cash-free basis, with potential post-closing adjustments for working capital. This divestiture represents a strategic move by Home Depot to streamline its operations and focus on its core retail business. Investors should note that the sale is expected to close in the third fiscal quarter of 2007 and is not contingent on financing. The agreement includes customary closing conditions, termination rights, and a substantial termination fee payable by the purchaser under specific circumstances, as well as non-compete and non-solicit provisions to govern post-transaction relationships.
Key Highlights
- 1Home Depot has entered into a definitive agreement to sell HD Supply, Inc. and CND Holdings, Inc. for $10.325 billion.
- 2The buyers are Pro Acquisition Corporation, an affiliate of private equity firms Clayton Dubilier & Rice, Carlyle Group, and Bain Capital.
- 3The sale includes certain intellectual property rights related to the Transferred Companies.
- 4The transaction is structured on a debt-free, cash-free basis with a potential post-closing adjustment for working capital.
- 5The deal is expected to close in the third fiscal quarter of 2007 and is not dependent on the purchaser obtaining financing.
- 6The agreement includes a $309.75 million termination fee payable by the purchaser under specific conditions.
- 7Home Depot has agreed to a three-year non-compete provision and restrictions on customer data usage, and a non-solicit provision for employees.