Home Depot finally pulled the trigger and sold HD Supply to a group of private equity investors for $10.3 Billion. Wall Street may be happy with the decision as they believe that the battered HD can now focus on their retail business. The fact of the matter is that their retail business only has limited growth in the United States as they are beginning to duplicate stores within regional markets - they are clearly nearing saturation in the retail home improvement business.
I was a big fan of Home Depot when they purchased Hughes Supply, the maintsay of their HD Supply franchise. I believed that Home Depot had the name and the know how to build a great MRO/Contractor supply business that could compete with Grainger in the highly fractured $145 billion MRO North American marketplace. However - the HD Supply business has been on the auction block for sometime now as the result of pressure from the street to raise the lagging HD share price.
All I can say is kudos to Bain Capital LLC, Carlyle Group and Clayton Dubilier & Rice - this is solid investment on their part and one that is sure to grow in the coming years. As for HD - if you haven't dumped this stock yet please do so. HD has sold their only growth business...
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