Home Depot ramps up service offerings to its ‘Pro’ clients by acquiring Compact Power Equipment, a provider of equipment rental and maintenance services, for $265 million.

The Home Depot Inc. continues its own building project, acquiring a light equipment rental and maintenance services company to help cement relations with professionals in the building and industrial markets.

Home Depot agreed yesterday to acquire Compact Power Equipment Inc., a national provider of equipment rental and maintenance services, for $265 million in cash. The transaction is expected to close by the end of Home Depot’s fiscal second quarter.

Pro customer sales grew twice as fast as DIY customer sales in the first quarter of fiscal 2017.
Carol Tomé, CFO
Home Depot

Compact Power has been a Home Depot commercial partner since 2009 and provides equipment rentals through more than 1,000 stores in the United States and Canada. Home Depot says the Compact Power acquisition furthers its investment in serving its core customers. “The acquisition allows us to further improve the customer experience—in particular for pros—through enhanced equipment and tool rental offerings. It also allows us to grow Compact Power’s best-in-class building services capabilities,” Home Depot CEO Craig Menear says.

A Home Depot spokeswoman declines to disclose whether Home Depot will offer equipment rental at its other 1,281 stores, noting that the company will share details on future plans after the deal closes.

Compact Power’s customers are mostly professionals, the Home Depot spokeswoman says. Compact Power has two business segments. One rents small equipment, such as trenching tools and small excavators. Customers can schedule a rental on CPIequipment.com, the company’s website, as well as on HomeDepot.com, with equipment delivery or pick-up at participating stores. On completing a form, a Compact Power representative contacts the customer to arrange payment and confirm delivery.

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The company’s other business segment is Compact Power Equipment Services, which provides onsite or in-house maintenance and repair services in such fields as light construction (equipment with 50 horsepower or less), light industry and machine tools. It also provides parts management, warehousing and distribution services.

Professional builders accounted for about 45% of Home Depot’s total sales, or $42.57 billion, in 2016, company executives have said, and the home improvement company expects that side of the business to grow as it incorporates Interline Brands and its network of e-commerce sites.

Home Depot acquired Interline, a national distributor of maintenance, repair and operations, or MRO, products in 2015 for $1.63 billion. The business accounted for about 2% of Home Depot’s total 2016 sales, or about $1.89 billion of $94.60 billion, chief financial officer Carol Tomé told stock analysts on the company’s year-end earnings call.

Pro customer sales grew twice as fast as DIY customer sales in the first quarter of fiscal 2017, Tomé told investors on the company’s quarterly earnings call.

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Home Depot is No. 87 in the 2017 B2B E-Commerce 300.

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