Posted September 25, 2019

HD Supply to split into two companies

HD Supply Holdings announced its intention to separate its Facilities Maintenance and Construction & Industrial businesses into two independent publicly traded companies.

The separation is expected to be completed by the middle of fiscal 2020.

“After years of growth, Facilities Maintenance and Construction & Industrial have achieved sufficient scale to operate as independent companies,” said Joe DeAngelo, chairman and CEO, HD Supply. “Each business is now positioned as a leader in its respective market and has the ability to enhance its competitive advantage by further differentiating its best-in-class customer service through additional focus.”

The Facilities Maintenance business will continue to focus on providing MRO products, value-add services and custom products to multifamily, hospitality, healthcare and institutional property owners and managers. Facilities Maintenance operates a distribution center-based model and sells its products primarily through a professional sales force, e-commerce and print catalogs. The company intends to retain the HD Supply name and ticker symbol. HD Supply Facilities Maintenance generated approximately $3 billion in net sales in fiscal 2018.

The Construction & Industrial-White Cap business will continue to serve as a one-stop shop providing concrete accessories and chemicals, tools and equipment, building materials and fasteners, erosion and waterproofing and safety products to professional contractors in non-residential, residential and industrial applications. Construction & Industrial generated approximately $3 billion in net sales in fiscal 2018.

John Stegeman, currently president of Construction & Industrial, is expected to serve as CEO, and Alan Sollenberger, currently chief operating officer, is expected to serve in the same capacity after the separation.

Upon completion of the separation, each company is expected to be publicly listed and traded on a nationally recognized stock exchange. Both companies are expected to remain headquartered in Atlanta.