Lowe’s recently announced it has entered into a definitive agreement to acquire Maintenance Supply Headquarters, a leading distributor of maintenance, repair, and operations (MRO) products to the multifamily housing industry, for a total transaction value of $512 million.
Editor’s Note: Check out our Lowes vs Home Depot article for our take on these two behemoth home improvement stores.
Based in Houston, Texas, Maintenance Supply Headquarters operates 13 distribution centers serving customers in 29 geographic areas, primarily in the western, southeastern and south-central U.S., with a portfolio of more than 5,300 products and value-added services for maintaining and renovating multifamily properties.
The acquisition is expected to be completed in Lowe’s second fiscal quarter, following the receipt of regulatory approval and satisfactory completion of customary closing conditions. Purchasing Maintenance Supply Headquarters is an important step in Lowe’s strategy to deepen and broaden its relationship with the Pro customer and better serve their needs.
When combined with Lowe’s November 2016 acquisition of Central Wholesalers, a prominent MRO distributor in the Mid-Atlantic and Northeast, this acquisition will substantially expand Lowe’s ability to serve the multifamily housing industry. Here’s more about the news that Lowe’s Acquires Maintenance Supply Headquarters.
“Lowe’s has long served the multifamily housing industry through our Pro Services business, and we are excited about the potential to further expand our presence in this highly attractive and growing customer segment. Together, Maintenance Supply Headquarters and Central Wholesalers will expand our capabilities in serving this key segment while strengthening our platform for future growth with enhanced product and service offerings for MRO customers.”Richard D. Maltsbarger, Lowe’s Chief Development Officer
Founded in 2006, Maintenance Supply Headquarters’ broad product offering includes appliance, plumbing, HVAC, lighting, hardware, electrical and other products for maintaining and renovating multifamily properties, as well as services such as renovation project support, custom fabrication, and educational classes.
Upon the close of the Maintenance Supply Headquarters transaction, Lowe’s combined multifamily MRO business will include 16 distribution centers in regions throughout the nation generating more than $400 million in annual sales.
“We are thrilled to become part of the Lowe’s family and have high regard for the team and the company’s leadership in the home improvement industry. Our partnership with Lowe’s marks an exciting next step in the evolution and growth of Maintenance Supply Headquarters. Like Lowe’s, our team shares a commitment to deliver truly exceptional service for our customers, and over the past 10 years, we have been privileged to serve many of the nation’s top multifamily property management companies and their communities. We look forward to the new opportunities ahead.”Richard “Rusty” Penick, co-founding partner and CEO of Maintenance Supply Headquarters
Pros have to buy their materials somewhere, too, and Lowe’s has obviously seized upon an opportunity to broaden its customer base beyond the homeowner to better serve that Pro base. That’s not to say this is the company’s first foray into the Pro market – it’s had Pro services for years, but when a company has the cash to grow through the acquisition of another strong company rather than fighting for organic growth, it can potentially make a quantum leap. That’s especially important when you have a gigantic competitor like Home Depot.
We can only assume that the strength and opportunity that Lowe’s sees in Maintenance Supply Headquarters comes from adept management. It was founded just eleven years ago and is getting picked up for $512 million. Doesn’t sound like a bad payday for a decade’s work. The company carries most all the needed items for building and maintaining multi-family properties. Even though Lowe’s homeowner customers have grown, its Pro customer base is growing even faster. The acquisition is expected to positively affect Lowe’s income immediately, which sounds like an all-around good move.
In any event, Pros will probably be happy to know that the big hardware retailer will grow to better accommodate their needs for building and maintenance supplies. Now, if you’ll excuse us, we have a decade of work to get started on!