Exclusive: Private equity owners plan HD Supply IPO - sources
By Olivia Oran and Soyoung Kim
NEW YORK (Reuters) - Private equity owners are preparing to take HD Supply public, nearly six years after buying the industrial distribution company out of Home Depot Inc (HD.N: Quote) for $8.5 billion, three people familiar with the matter said on Monday.
Bain Capital, Carlyle Group and Clayton, Dubilier & Rice, the buyout firms who jointly led the deal in 2007, plan to interview investment banks next week to select underwriters for the proposed initial public offering (IPO), the people said.
Representatives for Bain and CD&R declined to comment. Carlyle and HD Supply did not immediately respond to requests for comment.
HD Supply is one of the largest distributors of construction, industrial and maintenance supplies in North America and the IPO would be the latest attempt to capitalize on the rebound in the U.S. housing sector, which was hit hard by the turmoil in the U.S. credit market in late 2007.
Low interest rates and rising rents have pushed many consumers to buy homes, reviving the housing market.
Home Depot, which maintained a 12.5 percent stake in HD Supply as part of the buyout, declined to comment about the proposed IPO.
Home Depot divested HD Supply after building it up into a $12 billion company, but the deal coincided with the credit crisis, and the business suffered from the subsequent downturn in the housing market.
HD Supply's performance has improved significantly in recent years as residential and commercial construction rebounds from the trough of the financial crisis. It reported $7 billion in revenues and more than $500 million in adjusted earnings before interest, tax, depreciation and amortization (EBITDA) for the fiscal year ended January 2012. Continued...