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Home Depot Inc.'s sale of HD Supply might have a different outcome if the parties were negotiating today.
In August, Bain Capital LLC, Carlyle Group and Clayton, Dubilier & Rice Inc. succeeded in cutting the sale price of HD Supply, a wholesale buildings supply unit, to $8.8 billion from $10.3 billion. Home Depot, after weeks of discussions, also agreed to retain a 12% stake in HD Supply and backstop $1 billion of debt. "The renegotiations would be much tougher if it happened today," said Glenn Youngkin, a Carlyle Group managing director, who was speaking at the Dow Jones Private Equity Analyst Outlook conference Wednesday. The HD sale came at a different time in the market, at the front end of the credit crunch, he said. Home Depot also had the corporate desire to sell the business, while the buyers really liked HD Supply, Youngkin said. "The money package would be impossible to replicate today," he said. Carlyle also had foreseen the downturn in the housing market. "We think over the five-year period it's quite a deal," he said. When asked if HD Supply spurred other buyers to renegotiate their deals, Youngkin said each deal must be evaluated on an individual basis. - Luisa Beltran See TheDeal.com: PE firms cut price for HD Supply CategoriesPrivate capital video
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