Home Depot Supply Sales Faces Issues

New York, NY, May 23, 2007--Home Depot’s efforts to sell its supply unit, HD Supply, are facing headwinds due to a softer U.S. housing market and other complications, the New York Post reported on its Web site this week.

Three private-equity bidding groups are still in contention for the business, which sells building materials, waste water and utility products to municipalities and contractors, but a fourth dropped out, the paper said, citing unnamed sources.

Home Depot, the world's largest home-improvement chain, said earlier this year it hired Lehman Brothers as its financial adviser as it considered a sale, spin-off or initial public offering of HD Supply. Analysts have valued the unit at more than $10 billion.

The company launched the supply business in 1997 and expanded it by acquiring companies like water and sewer products supplier National Waterworks Holdings.

Those acquisitions make it more difficult for potential buyers to analyze the business, which was slowing the process, the paper said.