Home Depot (HD - commentary - Cramer's Take) said Monday that it is mulling the spinoff or sale of its wholesale distribution business as part of an effort to focus on its retail operations.
The move is one of the first big steps taken by new Chief Executive Frank Blake, who stepped into the top spot in January following the departure of embattled CEO Robert Nardelli.
The Atlanta-based home improvement giant said it hired Lehman Brothers to help it evaluate alternatives for the supply business, including a possible sale, spinoff or initial public offering. The company said there can be no assurance that a deal will occur, or when it might be undertaken.
Unloading the supply business would unwind Nardelli's efforts to bulk up Home Depot's non-retail operations. The company doubled the size of the business last year with the acquisition of Hughes Supply.
"We are undertaking this action today because of our desire to increase our focus on our retail business," Blake said in a statement. "With annual revenues of approximately $12 billion, HD Supply is a healthy, growing and vibrant business, and we are undertaking this evaluation to determine whether there are strategic alternatives with respect to HD Supply that would optimize shareholder value."
Shares of Home Depot were rising 70 cents, or 1.7%, to $41.70 in premarket trading.
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