search
cart
facebook instagram twitter linkedin youtube
  • Sign In
  • Create Account
  • Sign Out
  • My Account
  • NEWS
  • PRODUCTS
  • CONTRACTORS
    • BATH & KITCHEN PRO
    • BUSINESS MANAGEMENT
    • HIGH EFFICIENCY HOMES
    • TECHNOLOGY
    • WATER TREATMENT
    • PMC COLUMNS
      • Dave Yates: Contractor’s Corner
      • John Siegenthaler: Hydronics Workshop
      • Kenny Chapman: The Blue Collar Coach
      • Matt Michel: Service Plumbing Pros
      • Scott Secor: Heating Perceptions
  • ENGINEERS
    • CONTINUING EDUCATION
    • DECARBONIZATION | ELECTRIFICATION
    • FIRE PROTECTION
    • GEOTHERMAL | SOLAR THERMAL
    • PIPING | PLUMBING | PVF
    • PME COLUMNS
      • Christoph Lohr: Strategic Plumbing Insights
      • David Dexter: Plumbing Talking Points
      • James Dipping: Engineer Viewpoints
      • John Seigenthaler: Renewable Heating Design
      • Lowell Manalo: Plumbing Essentials
      • Misty Guard: Guard on Compliance
  • RADIANT & HYDRONICS
    • RADIANT COMFORT REPORT
    • THE GLITCH & THE FIX
  • INSIGHTS
    • CODES
    • GREEN PLUMBING & MECHANICAL
    • PROJECT PROFILES
    • COLUMNS
      • Codes Corner
      • Natalie Forster: Editorial Opinion
      • Guest Editorial
    • SPONSOR INSIGHTS
  • MEDIA
    • PODCASTS
    • VIDEOS
    • WEBINARS
  • RESOURCES
    • INDUSTRY CALENDAR
    • DIRECTORIES
    • EBOOKS
    • PM BOOKSTORE
    • CE CENTER
    • MARKET RESEARCH
    • CLASSIFIEDS
  • EMAGAZINE
    • EMAGAZINE
    • ARCHIVE ISSUES
    • CONTACT
    • ADVERTISE
    • PME EMAGAZINE ARCHIVES
  • SIGN UP!

HD Supply To Sell HVAC, Plumbing Business To Hajoca

September 13, 2011
Atlanta-based HD Supply, No. 2 on Supply House Times’ 2011 Premier 150 ranking, agreed to sell its plumbing and HVAC business Aug. 25 to Hajoca Corp.

Atlanta-based HD Supply, No. 2 on Supply House Times’ 2011 Premier 150 ranking, agreed to sell its plumbing and HVAC business Aug. 25 to Hajoca Corp., No. 10 on the 2011 ranking. Transaction details were not disclosed; the sale is expected to be completed this month.

“After carefully evaluating the opportunities, we determined that a sale of our Plumbing/HVAC business to Hajoca Corp. was in the best interests of our company as a whole and would be a good strategic fit for both businesses,” HD Supply told Modern Distribution Management magazine a day after the announcement.

The Evolution of HD Supply

HD Supply was formed in early 2006 by The Home Depot’s purchase of Orlando, Fla.-based Hughes Supply for $3.47 billion (including debt). The division continued to acquire companies, with sales up 159 percent in the third quarter of 2006. It contributed $2.1 billion of Home Depot’s $2.3 billion third-quarter 2006 sales growth.

Yet in February 2007, The Home Depot announced it was considering selling HD Supply to focus on its retail business, which was lagging. After months of speculation - in the industry and on Wall Street - Home Depot finally came to an agreement in August 2007 with three private equity firms (Bain Capital, a global private investment firm based in Boston; The Carlyle Group, a global private equity firm based in Washington; and Clayton, Dubilier & Rice, a New York and London-based private equity investment firm) to buy the division for $8.5 billion. Home Depot would retain 12.5 percent equity stake in the company.

At that time, HD Supply was the second largest distributor of construction, industrial and maintenance supplies in North America, with 2006 revenues in excess of $12 billion.

In November 2007, the wholesale distributor sold its lumber and building materials business to Pro-Build Holdings. The following month, HD Supply announced its intentions to sell its HVAC business to Coconut Grove, Fla.-based Watsco. Supply House Times quoted an investor who said selling the lumber business “was a natural” because that segment of the industry wasn’t profitable anymore; HVAC was similar in that it was seasonal and HD didn’t have a national HVAC presence.

However, the deal fell through in January 2008 because the two companies could not come to an agreement. HD Supply was also closing locations due to the slump in the residential housing market, the company said. Those closings included eight branches of the former Apex Supply Co. - the company that essentially started HD Supply with it’s acquisition by Home Depot in 2000.

The waterworks division of HD Supply acquired D&M Fabrication in March 2008, and in April the company launched two proprietary brands; one for kitchen and bath consumers, the other for heavy-duty products such as tools and hardware for the trades.

In November 2008, Carlyle Group, one of the three HD Supply owners, told its investors that its share in HD Supply was worth about 85 cents on the dollar.

February 2009 saw Home Depot paying HD Supply $22 million in a post-closing purchase price adjustment, part of their agreement.

“In connection with its minority stake in HD Supply, Home Depot recently announced that it would record a pre-tax charge of $163 million for a write-down of its investment in HD Supply,” Supply House Times reported. “The write-down reflects a lower valuation for its investment and is consistent with the decrease in the overall market since 2007. According to HD Supply, this accounting adjustment does not impact HD Supply's operations, funding or access to capital.”

The company reported a $514 million for fiscal year 2009 and a revenue decrease of 24 percent. It had already closed three branches and cut 65 employees in the first nine months of the year, but intended to consolidate 25 branches and cut 350 more employees to trim its costs. By Aug. 1, 2010, the company had closed or consolidated 25 branches and cut 425 employees.

“Financial performance declines in fiscal year 2009 were primarily a result of continued decline in the residential, commercial, and municipal construction markets, decline in the oil and gas markets, and unfavorable fluctuations in prices of commodities, such as steel, PVC, copper, and nickel,” reported Modern Distribution Management magazine. “Volume declines were partially offset by positive impacts from efforts to gain new market share.”

HD Supply hired a new CFO in early 2010, but losses continued that year - $619 million for fiscal 2010, yet sales eked up about 1 percent.

“Our liquidity remains very strong, which allows us to meet our commitments and continuously invest in profitable growth,” stated CEO Joe DeAngelo.

HD Supply’s financial outlook is starting to turn around in 2011. Acquisitions began again in early in the year as the company’s Waterworks Division bought Watervliet, N.Y.-based Rexford-Albany Municipal Supply Co. (RAMSCO).

And for the first six months of fiscal year 2011, the company reported an increase in net sales of 7.5 percent from the same period in 2010. Loss from continuing operations before income taxes was $231 million in the six months ended July 31, 2011, an improvement of $76 million as compared to the same period of fiscal 2010.

Links

  • Follow PM on Twitter!
  • Hajoca Corp.
  • HD Supply

Share This Story

Looking for a reprint of this article?
From high-res PDFs to custom plaques, order your copy today!

Recommended Content

JOIN TODAY
to unlock your recommendations.

Already have an account? Sign In

  • Worker using the Milwaukee Tool SWITCH PACK drain cleaner

    Pipeline profits: Drain cleaning, pipe inspection create opportunities

    Drain cleaning and inspection services offer lucrative...
    Plumbing News
    By: Nicole Krawcke
  • Uponor employee, Arturo Moreno

    The reinvestment in American manufacturing and training

    Plumbing & Mechanical Chief Editor Nicole Krawcke and...
    Plumbing News
    By: Nicole Krawcke and Natalie Forster
  • March 2024 Women in Plumbing hero image of woman engineer overlayed by circle of hexagon shapes with numbers from 1 to 10

    Celebrating 10 Influential Women in the Plumbing Industry

    Celebrating Women's History Month and Women in...
    Plumbing News
    By: Nicole Krawcke
Subscribe For Free!
  • eNewsletters
  • Online Registration
  • Subscription Customer Service
  • eMagazine
  • Manage My Preferences

More Videos

Sponsored Content

Sponsored Content is a special paid section where industry companies provide high quality, objective, non-commercial content around topics of interest to the Plumbing & Mechanical audience. All Sponsored Content is supplied by the advertising company and any opinions expressed in this article are those of the author and not necessarily reflect the views of Plumbing & Mechanical or its parent company, BNP Media. Interested in participating in our Sponsored Content section? Contact your local rep!

close
  • J.J. Keller CMV vehicles on road
    Sponsored byJ. J. Keller & Associates, Inc.

    The dash cam game-changer for small business safety

Popular Stories

The interior of a government building.

President Trump signs executive order promoting skilled trades and apprenticeships

Figure 1 is a sketch of the flow problems of the current plumbing system.

Hydronic heating glitch solved: Why adding a circulator won't fix primary loop flow issue

Underfloor heating installation with drain sewer hole in bathroom close up on water floor heating.

Using hydronics to leverage time-of-use electrical rates

PM BEMIS June 25 Free Webinar: Optimizing Plumbing Solutions for Single-Family, Multi-Family & Public Spaces

Events

November 13, 2024

Future Proofing MEP: Navigating the 2026 High Efficiency Water Heating Standards

Join our deep dive into DOE’s new standards so you can future-proof your MEP practice.

EARN: 0.1 ASPE CEU; 1 AIA LU/HSW; 0.1 IACET CEU*; 1 PDH

View All Submit An Event

Poll

Will business be up or down in 2025?

Do you anticipate business in 2025 to be up or down in comparison to 2024?
View Results Poll Archive

Products

The Water Came To A Stop

The Water Came To A Stop

See More Products

Download the FREE Water Conservation, Quality & Safety eBook: Plumbing Trends Increasing Safe Water Availability

Related Articles

  • HD Supply to sell its Industrial PVF business

    See More
  • Headlines

    HD Supply to sell Waterworks unit

    See More
  • June 19, 2007 - Home Depot In $10 Billion Deal To Sell HD Supply, Sources Say

    See More

Related Products

See More Products
  • plumbing hvac.jpg

    2025 National Plumbing & HVAC Estimator

  • phe.gif

    Plumbing & HVAC Manhour Estimates

See More Products
×

Keep your content unclogged with our newsletters!

Stay in the know on the latest plumbing & piping industry trends.

JOIN TODAY!
  • RESOURCES
    • Advertise
    • Contact Us
    • Directories
    • Store
    • Want More
    • Supply House Times
  • SIGN UP TODAY
    • Create Account
    • eMagazine
    • eNewsletter
    • Customer Service
    • Manage Preferences
  • SERVICES
    • Marketing Services
    • Reprints
    • Market Research
    • List Rental
    • Survey/Respondent Access
  • STAY CONNECTED
    • LinkedIn
    • Facebook
    • Instagram
    • YouTube
    • X (Twitter)
  • PRIVACY
    • PRIVACY POLICY
    • TERMS & CONDITIONS
    • DO NOT SELL MY PERSONAL INFORMATION
    • PRIVACY REQUEST
    • ACCESSIBILITY

Copyright ©2025. All Rights Reserved BNP Media.

Design, CMS, Hosting & Web Development :: ePublishing