Home Depot’s $5.5B GMS Deal: What Interior Trades Should Watch
The Home Depot has expanded its reach in the professional construction supply market through its acquisition of GMS Inc., a move that effectively brings the legacy of Westside Building Material into Home Depot’s growing pro distribution network. While Home Depot did not purchase Westside directly, Westside became part of GMS in 2021, and GMS is now operating under Home Depot’s subsidiary SRS Distribution.
Home Depot won GMS Inc. in a bidding contest, closing the deal in early September 2025 at $110.00 per share in cash. That valued GMS at roughly $4.3 billion in equity and about $5.5 billion including net debt, a 36 percent premium to where the stock traded before the auction started. The purchase was made through SRS Distribution, the roofing and building products distributor Home Depot had bought fifteen months earlier.
For drywall and interior finish contractors, this is the more consequential of the two 2025 distribution deals, because GMS is a wallboard and steel framing supplier first.
What Home Depot bought
GMS entered the deal with more than 320 distribution centers and nearly 100 tool sales, rental, and service centers, over 400 locations total across 48 states and six Canadian provinces, and 7,113 employees, about 8 percent of them unionized. Its fiscal 2025, which ended April 30, 2025, gives the clearest public picture of drywall distribution economics available anywhere, since FBM was privately held.
| Category | Net sales | Share | Year over year |
|---|---|---|---|
| Wallboard | $2,198.3 million | 39.9% | down 2.9% |
| Complementary products | $1,725.9 million | 31.3% | up 4.6% |
| Steel framing | $796.2 million | 14.4% | down 10.8% |
| Ceilings | $793.3 million | 14.4% | up 14.1% |
Total net sales came in at $5.51 billion, up 0.2 percent, but organic sales fell 5.8 percent. Net income dropped 58.2 percent to $115.5 million and adjusted EBITDA fell 18.6 percent to $500.9 million. Read those numbers together and the picture is clear: steel framing volume was contracting, wallboard was soft, and only complementary products and ceilings were growing. Home Depot paid a 36 percent premium into that.
The bidding war
QXO, the roll up vehicle run by Brad Jacobs, went public with a $95.20 per share cash proposal on June 18, 2025, roughly $5 billion, and gave the GMS board until June 24 to engage. The letter carried an explicit threat: “If you choose not to engage with us, or choose to engage in an unconstructive manner, we are prepared to take our Offer directly to GMS’s shareholders.”
Within days the Wall Street Journal reported Home Depot was preparing a competing bid and GMS shares traded above QXO’s offer. QXO declined to raise on June 20 and Home Depot took the company at $110 on June 30. QXO redirected its capital, later acquiring Kodiak Building Partners and then TopBuild for $17 billion.
The escalation from $95.20 to $110.00, about 15.5 percent, against a target whose adjusted EBITDA had just fallen 18.6 percent, is the useful signal here. Strategic buyers paid up for distribution scale during a soft cycle. Lowe’s paid 13.4 times adjusted EBITDA for FBM two months later, which anchors the same conclusion from a different direction.
Regulatory path
The transaction did not sail through unexamined. On August 7, 2025, Home Depot withdrew and refiled its Hart-Scott-Rodino premerger notification to give the Department of Justice Antitrust Division additional review time. The DOJ granted early termination of the waiting period on August 21, and the tender closed with about 79.5 percent of shares tendered. No challenge, no divestiture conditions.
What executives have committed to
Dan Tinker, CEO of SRS Distribution, supplied the number worth remembering: “Together, we’ll create a network of more than 1,200 locations and a fleet of more than 8,000 trucks capable of making tens of thousands of jobsite deliveries per day.”
On the question every contractor asks after an acquisition, whether branches get cut, Tinker has been direct. Speaking to Walls & Ceilings in October 2025, he said: “We didn’t buy GMS to cut costs. We bought GMS to double its size.” GMS retains its brand and market identity, following the pattern SRS and Heritage set, with a national account team coordinating across divisions.
That is stated intent, not results. As of this writing no branch closures have been announced, and Home Depot has never broken out GMS or SRS revenue separately in any earnings release or annual report.
What the integration has produced so far
On Home Depot’s first quarter fiscal 2026 earnings call in May 2026, chair and CEO Ted Decker said the company expects “something like $400 million of cross-sell run rate” this year and would “look to double that next year.” Decker also noted that GMS carried more exposure to large homebuilders than SRS did, and is introducing both SRS and Home Depot to that customer base. CFO Richard McPhail attributed the fiscal 2026 gross margin guidance of 33.1 percent largely to the GMS acquisition, since distribution carries different margin structure than retail.
Home Depot reported fiscal 2025 total sales of $164.7 billion, up 3.2 percent, and plans 40 to 50 new SRS locations in 2026. On the Pro side specifically, the company reports it has trade credit expansion, pricing pilots, and order management improvements already in place.
The practical read for interior contractors
Two things are now true at once. First, your wallboard supplier and your competitor’s wallboard supplier are both likely owned by a national retailer, since Home Depot holds GMS and Lowe’s holds Foundation Building Materials. Second, both parent companies are competing hard for the same professional customer, which historically produces better service terms rather than worse ones, at least while the competition lasts.
What to actually monitor: delivered pricing on wallboard and steel framing across the next several quarters, whether your credit line and terms survive account review, and whether delivery windows tighten or loosen as the combined fleets get routed. Those are measurable on your own invoices. Everything else being written about these mergers is inference.
Sources
Home Depot, completion of GMS acquisition, September 4, 2025
GMS merger agreement announcement, June 30, 2025
GMS fiscal year 2025 results, June 18, 2025
GMS Inc. Form 10-K, fiscal year ended April 30, 2025
QXO proposal to acquire GMS, June 18, 2025
Home Depot, HSR early termination granted, August 21, 2025
Walls & Ceilings, what the acquisition means for contractors, October 30, 2025
Home Depot, SRS Distribution acquisition announcement, March 28, 2024
Construction Dive coverage, July 1, 2025
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