Private Equity Firms: We’re Ready to Take HD Supply Public

Three people familiar with the matter said on Monday that private equity managers from Bain Capital, the Carlyle Group, and Clayton, Dubilier & Rice were prepared to take HD Supply public, following the trio’s collective buyout of the industrial distribution company from Home Depot (NYSE:HD) in 2007.

HD Supply is one of the largest suppliers and distributors of construction and industrial supplies, and the move being made to take the company public is an effort by the three equity firms to capitalize on the growing new housing market, which has spiked in recent months. Low interest rates and rising rents have pushed many consumers to buy homes, reviving the housing market, Reuters reported.

Home Depot maintained a 12.5 percent stake in HD Supply, but refused to comment on the rumored IPO. Home Depot built HD Supply into a $12 billion dollar company, but the company’s investments coincided with the credit crisis in 2007 and 2008 when the housing market dropped off.

However, since that time, HD Supply has rebounded well, reporting $7 billion in revenues and more than $500 million in adjusted EBITDA for the fiscal year ended January 2012. Between January and October of last year, sales grew 12.4 percent.

Other home building companies have considered a move to go public, and those who have watched their shares pick up with the housing market’s improvement. Taylor Morrison is set to go public in March and requested a $250 million IPO. It later doubled that amount.

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