Lowe’s Companies said Thursday it had agreed to acquire wholesaler Maintenance Supply Headquarters for $512 million in a bid to increase its professional customer business.
Maintenance Supply distributes products for the maintenance, repair and operation (MRO) of multifamily buildings. As Reuters reports, Lowe’s has been seeking to expand its business with professionals such as contractors after focusing primarily on the home improvement market.
Homeowners and do-it-yourself shoppers “typically spend less on big-ticket items compared to professional customers,” Reuters noted, adding that Lowe’s larger rival Home Depot “has already sharpened its focus on professionals, helping the company post strong sales in recent quarters amid a robust U.S. housing market.”
In an earlier foray into the pro market, Lowe’s in 2016 acquired Central Wholesalers, a maintenance products distributor in the Mid-Atlantic and Northeast.
“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,” Richard D. Maltsbarger, Lowe’s chief development officer, said in a news release.
“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,” he added.
Maintenance Supply’s 13 distribution centers serve customers in 29 geographic areas, primarily in the western, southeastern and south central U.S. Its products include appliances, plumbing, HVAC and lighting.
According to Lowe’s, the combined operation, consisting of 16 distribution centers, will generate more than $400 million in annual sales. The acquisition is expected to add to Lowe’s earnings in the year ending February 2018 and be completed in the quarter ending July 31.
Maltsbarger told the Charlotte Observer that the surge in apartment building development offers a particularly attractive opportunity for Lowe’s pro customer business.
“With the growth of multifamily [construction] that has occurred over the last decade, as well as what will occur going forward, it gives us a great chance to access the more than 30 percent of Americans who rent their place of residence,” he said.