HD Supply Rises After Announcing Intent to Break Into 2 Companies
Shares of HD Supply (HDS) - Get HD Supply Holdings, Inc. Report were rising in trading Wednesday after the company announced its intention to separate its Facilities Maintenance division from its Construction & Industrial business into two independent publicly traded companies.
The separation is expected to be completed by the middle of fiscal 2020.
"After years of growth, Facilities Maintenance and Construction & Industrial have achieved sufficient scale to operate as independent companies," said CEO Joe DeAngelo. "Each business is now positioned as a leader in its respective market and has the ability to enhance its competitive advantage by further differentiating its best-in-class customer service through additional focus."
The Facilities Maintenance division, which will be renamed HD Supply Facilities Maintenance, generated about $3 billion in net sales in fiscal 2018 ended Feb. 3, 2019. DeAngelo will serve as CEO.
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John Stegeman, currently president of Construction & Industrial, will serve as CEO of Construction & Industrial White Cap business, which will provide concrete accessories and chemicals, tools and equipment to professional contractors. That division also generated about $3 billion in net sales in fiscal 2018.
HD Supply shares were rising 3.3% to $39.19 in trading.
