Home Depot Makes an Unusual but Very Strategic Acquisition

Interline distributes and sells branded products for professional contractors, specialty distributors and janitorial equipment, among others. The company’s brand selection includes faucets, water heaters, lighting fixtures and many other items.

Strategically, the acquisition gives Home Depot a strong position in the building and maintenance professions. The company has seen its professional contractor sales grow more rapidly in recent quarters, and the acquisition expands both Home Depot’s offers for professionals and its ability to get products to them quickly. Interline currently operates 90 distribution centers in the United States, Canada and Puerto Rico.

In its announcement, Home Depot said it expects Interline to add to its bottom line earnings in fiscal year 2015, which ends in January of 2016. The company said it will update its fiscal 2015 sales and diluted earnings per share guidance to include the impact of the Interline acquisition when it reports second-quarter results on August 28.

Home Depot’s stock traded up about 0.7% this morning at $114.60 in a 52-week range of $79.45 to $117.99.

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