Home Depot building unit deal revised
atlanta -- As expected, Home Depot Inc. said Tuesday that it would sell its wholesale supply business to buyout firms for $8.5 billion -- nearly 18% less than previously agreed upon -- as the U.S. housing slump and recent credit crunch forced renegotiation of the deal.
The world’s largest home-improvement retailer will pay $325 million to keep a 12.5% stake in the supply business, which will be owned by Bain Capital Partners, Carlyle Group and Clayton, Dubilier & Rice. Total cash proceeds will come to $7.9 billion.
Analysts said the revised deal, first reported Sunday, cleared the way for the chain to focus on its retail stores and proceed with a current tender offer for 250 million shares.
Home Depot also agreed to guarantee a $1-billion senior secured loan for the contractor business. The deal will close Thursday.
The retailer has said that proceeds from the supply sale would help fund a $22.5-billion share repurchase. Shares of Home Depot rose 2 cents Tuesday to $35.05.
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