Distributor Heritage Pool Supply Group had already shaken up the industry with its aggressive entrance in 2018 and subsequent growth, acquiring 20 companies in the past three years with more reported to come. But on March 28, it shocked not only the pool industry but the stock market as well, when The Home Depot announced its intent to buy SRS Distribution, parent company to Heritage Pool Supply Group, for a whopping $18.25 billion. The sale was completed June 18.
Since 2020, The Home Depot has been making strategic investments to increase its offerings to the “complex pro” as the company calls them, or large, bulk customers. It purchased two distribution companies serving other industries and has been opening flat-bed distribution centers across the country. In 2023, 50% of the company’s $152 billion-plus sales were to pro customers.
“This is something we’ve been working towards for a long time,” says Matthew McDermott, president of Heritage Pool Supply. “We sought to bring them on as a partner to achieve our full potential and accelerate what we were already doing.” The SRS leadership team, including McDermott, will remain in place, he adds.
There’s so much more to be gained by the collaboration than the surface-level benefits of expansion and access to financial resources, he says.
“They’ve got a ton of infrastructure that will help us serve our customers,” McDermott says, pointing to its upstream and downstream technology. “And then also just the ways of doing business — branch efficiency, warehouse efficiency, routing and things like that. There are some distinct competitive advantages that we can start to layer over time.”
The Home Depot also brings programs — some that mirror what Heritage was already doing — that will affect the pool industry and Heritage employees, including its philanthropic initiatives, particularly for veterans and disaster relief, and job matching program for tradespeople and employee assistance funds.
While McDermott says they’re excited to leverage and learn from The Home Depot, the industry won’t be seeing any immediate changes.
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“We were purchased by them for who we are,” he says. “It’s not for them to integrate our business completely into theirs, merge it with retail stores or anything crazy. The good news for our customers and pool pros is it’s the same faces delivering the same quality service and products.”
The good news for our customers and pool pros is it’s the same faces delivering the same quality service and products.”
Matt McDermott, Heritage Pool Supply Group
Merging with The Home Depot retail stores is one of the myths that McDermott would like to quash. He also dispels the idea that professional pool products will start to appear on The Home Depot shelves or that you’ll see The Home Depot-branded Heritage branches.
“They’re not trying to disrupt independent, mom-and-pop pool retail,” McDermott says. “They don’t want to expand into anything that conflicts or competes with our customers or pool pros.”
Richard McPhail, executive vice president and chief financial officer of The Home Depot, echoed that in a call with J. P. Morgan after the deal was announced. “We have a best-in-class distribution company with exceptional management who we can learn from, and we can trade notes,” McPhail said. “SRS is going to operate as a standalone company. They’re going to do what they do best, but we’re going to learn a lot, and they’re going to teach us.”McDermott admits he’s biased when it comes to what The Home Depot partnership means for the pool industry at large. But he mentions the adage that a rising tide floats all boats. Research shows that two-thirds of American households shop at The Home Depot — “Think about the possibilities there, whether it directly benefits us or not,” McDermott says. “If it benefits the entire industry, it’s pretty powerful. Trying to get more pools built — that’s what fires me up.”
