The Home Depot to Buy Drywall Specialist GMS for $5.5B, Topping QXO's Bid

Locations of 435 Gypsum Management and Supply stores (blue dots) and 795 SRS Distribution Inc. stores (orange dots). Source: Webb Analytics data

by Craig Webb, President, Webb Analytics

The Home Depot's SRS Distribution unit will buy Gypsum Management and Supply (GMS) for $110/share (roughly $5.5 billion), topping QXO's $5 billion offer, GMS announced June 30.

GMS is the No. 12 company on Webb Analytics' Construction Supply 150, with $5.5 billion in sales in the fiscal year ended April 30. It is the biggest publicly traded drywall specialist in the U.S. Its chief rivals are ABC Supply's L&W Supply division and Foundation Building Materials.

GMS shares had been trading at $73.24 on June 17, the day before QXO's Brad Jacobs offered to buy the drywall giant for $95.20/share. The Home Depot said its $110/share price is about a 36% premium. The announcement slows Jacobs' goal of building QXO into a $50bln company. QXO acquired Beacon Building Products, a nearly $10bln roofing specialist, earlier this year.

“Following careful consideration of The Home Depot’s proposal, along with other potential opportunities for the Company, our Board determined that this transaction is in the best interests of GMS and all of our shareholders," GMS Board Chair John Gavin said. 

Home Depot President and CEO Ted Decker said his company had purchased SRS "as a platform for growth" and that SRS' integration into Home Depot had been a success. "The Home Depot’s growth strategy includes growing its share of wallet with professional contractors (Pros)," Home Depot said in a press release, "and the company is building differentiated offerings and capabilities to better serve Pros across their entire project – from large, complex jobs to smaller renovations and repairs. ... The acquisition of GMS will accelerate SRS’s vision of becoming a leading, multi-category building materials distributor, adding a new vertical that is adjacent to its existing business."

SRS CEO Dan Tinker said: “The combination of GMS and SRS will provide the residential and commercial professional contractor customer with more fulfillment and service options than ever before. 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."

This Webb Analytics map shows only the GMS locations. The orange pins are Ames Taping Tools locations. The green pins are drywall specialty stores that operate under roughly 50 different brand names.

The transaction is expected to close by Jan. 31, 2026, the end of The Home Depot's current fiscal year. "Under the terms of the merger agreement, a subsidiary of SRS will commence a cash tender offer to purchase all outstanding shares of GMS common stock for $110.00 per share, reflecting a total equity value of approximately $4.3 billion and implying a total enterprise value (including net debt) of approximately $5.5 billion," The Home Depot said. It expects to fund the transaction through cash on hand and debt.