U.S. home improvement retailer Lowe's Cos Inc (LOW.N) said it would buy Maintenance Supply Headquarters, a wholesale retailer of maintenance supplies, for $512 million, as it seeks to sell more to construction contractors.
Lowe's is trying to better serve professional customers such as construction contractors amid fierce competition from larger rival Home Depot Inc (HD.N).
Lowe's has so far mainly focused on homeowners and do-it-yourself shoppers, who typically spend less on big-ticket items compared to professional customers.
Home Depot, however, has already sharpened its focus on professionals, helping the company post strong sales in recent quarters amid a robust U.S. housing market.
Houston-based Maintenance Supply Headquarters operates 13 distribution centers, mainly in the western, southeastern and south-central United States.
The acquisition is expected to add to Lowe's earnings in the year ending February 2018 and be completed in the quarter ending July.
Goldman Sachs was Lowe's financial adviser, while Hunton & Williams LLP provided legal counsel.
Crutchfield Capital Corp was financial adviser to Maintenance Supply Headquarters, while Porter Hedges LLP was its legal adviser.
(Reporting by Sruthi Ramakrishnan in Bengaluru; Editing by Sai Sachin Ravikumar)