The Home Depot takes $2B cut in HD Supply sale price

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Amid a slumping real estate market, The Home Depot Inc. has agreed to new terms for the sales of its HD Supply unit. The new deal includes a purchase price of $8.5 billion and The Home Depot's agreement to acquire a 12.5 percent stake in the new company for $325 million. In addition, The Home Depot will guarantee a $1 billion senior secured loan to HD Supply.

The Home Depot expects to net approximately $7.9 billion in cash proceeds from the transaction, which is expected to close on August 30.

"We are now focused on our retail business," said Frank Blake, chairman/CEO of The Home Depot, in a statement. The decision to sell HD Supply has been positioned as a strategic one to refocus the business on core retail for the home user after an unpopular attempt to court contractors.

In June, The Home Depot, Atlanta, announced its sale of HD Supply to a private equity consortium formed by Bain Capital Partners, The Carlyle Group and Clayton, Dubilier & Rice for $10.3 billion.

However, amid increasingly frequent reports about the housing market slump and the resulting credit fallout, The Home Depot told investors earlier this month that the deal had hit some roadblocks and might not be completed. If that had happened, The Home Depot said it would integrate HD Supply into its retail unit.


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