Business

Home Depot announces plans to acquire Mexico's Total HOME

HISPANICVISTA - May 7, 2001 - The Home Depot, the world's largest home improvement retailer, announced it has signed a definitive agreement to acquire for cash Total HOME, a four-store chain of home improvement stores in Mexico, from ALFA, S.A. de C.V., a conglomerate based in Monterrey, Mexico. Financial terms of the acquisition were not disclosed.

Incorporated in 1993, Total HOME is Mexico's second largest home center retailer. Total HOME's four locations -- three stores in Monterrey and one store in Mexico City -- have more than 400,000 sq. ft. of retail space, plus building materials yards.

The acquisition is expected to be completed during the next five to six weeks after receipt of regulatory approvals.

"The acquisition of Total HOME gives us immediate and profitable entry into Mexico's $12.5-billion home improvement market," said Bob Nardelli, president and CEO of The Home Depot. "With the second largest economy in Latin America and some 23 million households, Mexico offers tremendous growth potential in all facets of the home improvement market."

The average Total HOME store is approximately 80,000 sq.-ft. indoors with additional square footage outside devoted to lawn and garden and building materials. Each warehouse-style store stocks approximately 30,000 SKUs across 17 departments. Total HOME serves both homeowners and the professional market.

Following completion of the acquisition, Total HOME will become a wholly- owned subsidiary of The Home Depot, and current Total HOME management will continue to manage all four stores from offices in Monterrey reporting to Anders Moberg, Home Depot's division president - international. The four stores will continue to operate short-term as Total HOME and will be rebranded as Home Depot following the transition and the training of the Total HOME associates by Home Depot.

Moberg said Total HOME is attractive to Home Depot due to its successful track record and business model similarity to Home Depot. "We share the same operating philosophy -- to offer customers the best in selection, price and service," he explained.

Moberg also said that by integrating the cultures of Home Depot and Total HOME, there will be many benefits for both companies.

"We will share resources for merchandising and operations," he explained. "There will be cross training among associates to ensure that the best practices of both companies are implemented. We also see many opportunities in the area of sourcing products."

"We will seek to streamline supply chain management for our stores in the U.S. and Mexico," Moberg said. "In addition, we expect to build and leverage relationships with Home Depot and Total HOME vendors to benefit our customers and store profitability."

"We are very pleased that Total HOME is joining forces with Home Depot to gain greater share of the Mexico home improvement market," said Ricardo Saldivar, president of Total HOME. "Our employees are excited about becoming part of the Home Depot organization, and we look forward to embracing the Home Depot culture and commitment to being the best in home improvement products and services."

The addition of Mexico increases Home Depot's presence internationally to four countries outside the United States -- the other three being Canada (67 stores), Chile (5 stores) and Argentina (3 stores).

Credit Suisse First Boston advised The Home Depot in this acquisition.

Founded in 1978, in Atlanta, Georgia, The Home Depot, the world's largest home improvement retailer, currently operates 1,180 stores in North and South America. The company reported net sales for fiscal 2000 of $45.7 billion and employs approximately 230,000 people. Home Depot is ranked sixth in Fortune magazine's Most Admired Companies in America list and has been #1 in Fortune's Most Admired Specialty Retailer category for eight consecutive years. Its stock is traded on the New York Stock Exchange and is included in the Dow Jones Industrial Average and the Standard & Poor's Index.