Home improvement giant Home Depot Inc. (NYSE: HD) announced Thursday morning that it has reached a definitive agreement to acquire privately held Compact Power Equipment for $265 million in cash. Compact Power has been a supplier of compact equipment rentals to Home Depot since 2009.
Compact Power provides rental services in over 1,000 of Home Depot’s more than 2,100 U.S. and Canadian stores. The transaction is expected to close by the end of Home Depot’s second fiscal quarter (this month).
Craig Menear, Home Depot’s chairman, CEO and president, said:
We’ve worked closely with the talented team at Compact Power Equipment for many years and are delighted to welcome them to The Home Depot family. The acquisition allows us to further improve the customer experience – in particular for Pros – through enhanced equipment and tool rental offerings. It also allows us to grow Compact Power’s best-in-class building services capabilities.
Compact Power’s CEO, Roger Braswell, noted:
With a collective focus on convenience and execution, together our companies will be even stronger to serve customers while remaining on the cutting edge of life-cycle management for commercial equipment.
Richard Porter, Compact Power’s chief operating officer, added:
This acquisition creates many exciting opportunities for our employees and customers as we enter the next stage in our company’s history. We are thrilled and truly look forward to joining The Home Depot team and growing this business.
Home Depot stock traded down about 0.7% Thursday morning, at $151.60 in a 52-week range of $119.20 to $160.86. Its share price is up about 13% for the year to date. The 12-month price target on the shares is $171.27.
Titan Machinery Inc. (NASDAQ: TITN), which operates as a wholesaler of agricultural and construction equipment, as well as a rental service, has seen its share price rise about 70% since last November’s election. The company’s market cap at Thursday’s price of around $17.67 is $376 million. Titan’s 52-week trading range is $8.68 to $19.22.