The Home Depot to Acquire National Waterworks

ATLANTA, Ga. – The Home Depot, the world's largest home improvement retailer, announced today that it has entered into an agreement to acquire National Waterworks Holdings, the nation's leading distributor of products used to build, repair and maintain water and wastewater transmission systems. National Waterworks will operate as part of The Home Depot Supply.

In addition to enhancing its core stores, The Home Depot also is focused on expanding customer growth outside its current retail channels. Over the past few years, it has built a leadership position in a range of markets that serve such business-to-business customers as maintenance and repair professionals, homebuilders and commercial builders. Together, these customers comprise an approximately $410 billion market opportunity.

"The Home Depot Supply is expanding its business by growing organically and acquiring best-in-class companies that share our commitment to customer service, operational excellence and growth," said Joe DeAngelo, president, The Home Depot Supply.

National Waterworks has an approximately 14-percent share of the estimated $11 billion water and wastewater transmission equipment distribution business. The company distributes a full line of pipes, fittings, valves, meters, fire hydrants, service and repair products and other components that are used to transport water to and from residential and commercial locations. Its products are critical to building, repairing and maintaining underground water and wastewater transmission and storm water collection systems. Through its network of over 130 branches in 36 states, National Waterworks sells directly to municipalities and contractors. For the fiscal year ended Dec. 31, 2004, it had net sales of $1.5 billion.

"Key business-to-business opportunities that add new customer channels are a vital part of our strategy," said DeAngelo. "We were attracted to National Waterworks because of its top position in the industry, use of customer facing technology to differentiate itself and the track record of its leadership team. We are pleased that they will continue to play a critical role in driving growth for the organization."

"Based on government and industry estimates, our nation's water infrastructure is aging rapidly. In fact, by 2020 more than 50 percent of our nation's water infrastructure will be outdated and will need significant replacement and repair," said Harry Hornish, Jr., president and CEO of National Waterworks. "We are poised to play a significant role in helping our public and private sector customers meet this challenge.

We are excited about joining forces with The Home Depot Supply to capture this market and provide top-notch products and services to municipalities, counties and contractors nationwide."

In addition to the pending acquisition of National Waterworks, The Home Depot recently acquired Utility Supply of America (USABlueBook). USABluebook is a leading national catalog distributor of MRO (maintenance, repair and operations) supplies to the water and wastewater treatment industry.

The National Waterworks agreement is anticipated to close by the end of August, and terms were not disclosed. Completion of the transaction is subject to customary conditions.