Transaction to Close August 30, 2007
ATLANTA, Aug. 28 /CNW/ -- The Home Depot(R), the world's largest home
improvement retailer, announced today that it has amended the purchase and
sale agreement for HD Supply to an acquisition corporation formed by
affiliates of Bain Capital Partners, The Carlyle Group and Clayton, Dubilier &
Rice ("the private equity consortium"). The terms of the purchase and sale
agreement were amended as follows:
-- Purchase price of $8.5 billion
-- The Home Depot to purchase a 12.5% equity interest for $325 million
-- The Home Depot to guarantee a $1 billion senior secured loan of HD
(Logo: http://www.newscom.com/cgi-bin/prnh/20030502/HOMEDEPOTLOGO )
In connection with the amendment, Merrill Lynch, JP Morgan and Lehman
Brothers provided to the private equity consortium revised debt commitment
letters for 100% of the third party debt financing. The closing will take
place on August 30, 2007. After giving consideration for the equity
investment and expenses associated with the transaction, the Company expects
to net approximately $7.9 billion in cash proceeds from the sale.
"Despite the softness in the financing and residential construction
markets, the terms of the HD Supply sale deliver shareholder value today and
in the future as we will share in HD Supply's upside potential. We are now
focused on our retail business," said Frank Blake, chairman & CEO of The Home
The Company reiterated its earnings outlook that it expects its earnings
per share from continuing operations to decline by 12-15 percent for fiscal
2007. Consolidated earnings per share are expected to decline by 15-18
percent for fiscal 2007.
The sale of HD Supply is not expected to have a material impact on the
Company's 2007 financial results. The Company's fiscal 2007 earnings per
share guidance does not include any earnings per share accretion arising from
the Company's announced $22.5 billion recapitalization plan.
The fiscal 2007 earnings per share outlook reflects 52 weeks and does not
include the impact of the 53rd week. The Company will have 53 weeks of
operating results in its fiscal 2007 financial results. The Company projects
that the 53rd week will add approximately three cents to its earnings per
share outlook for fiscal 2007.
Goldman, Sachs & Co. served as the Company's financial advisor for the
amended purchase and sale agreement.
The Home Depot(R) is the world's largest home improvement specialty
retailer, with 2,206 retail stores in all 50 states, the District of Columbia,
Puerto Rico, U.S. Virgin Islands, 10 Canadian provinces, Mexico and China. In
fiscal 2006, The Home Depot had sales of $90.8 billion and earnings of $5.8
billion. The Company employs approximately 364,000 associates. The Home
Depot's stock is traded on the New York Stock Exchange (NYSE: HD) and is
included in the Dow Jones industrial average and Standard & Poor's 500 index.
Certain statements contained herein, including any statements related to
the sale of HD Supply, and the Company's earnings per share guidance,
constitute "forward-looking statements" as defined in the Private Securities
Litigation Reform Act of 1995. These statements are based on currently
available information and are based on our current expectations and
projections about future events. These risks and uncertainties include, but
are not limited to: economic conditions in North America; the successful
divestiture of HD Supply; and the success of the recapitalization plan, as it
may be supplemented and amended from time to time. Undue reliance should not
be placed on such forward-looking statements as they speak only as of the date
hereof, and we undertake no obligation to update these statements to reflect
subsequent events or circumstances except as may be required by law.
Additional information regarding other risks and uncertainties is contained in
our periodic filings with the SEC, including our Annual Report on Form 10-K
for the fiscal year ended January 28, 2007.
For further information:
For further information: Financial Community, Diane Dayhoff, Sr. Vice
President of Investor Relations, +1-770-384-2666,
email@example.com, or News Media, Ron DeFeo, Director of Corporate
Communications, +1-770-384-3179, firstname.lastname@example.org, both of The Home
Depot Web Site: http://www.homedepot.com/