Seeking to carve out a larger share of the $475 billion home construction and home improvement professionals spend annually, The Home Depot Inc. has acquired International Designs Group LLC, a supplier of slab and tile materials for the kitchen and bath industry, for an undisclosed sum. The acquisition is the next step in Home Depot’s plan to grow its online and offline B2B channel.

International Designs owns and operates several design-oriented subsidiaries including Construction Resources. Construction Resources is a distributor of design-oriented surfaces, appliances, and architectural specialty products. It distributes to professional contractors focused on renovation, remodeling, residential and multi-family home building. The Home Depot is acquiring International Designs Group from private equity firm Mill Point Capital LLC. The acquisition is expected to close by year’s end.

A key aspect of the acquisition is that Construction Resources operates 39 showrooms throughout the east coast and the southeastern United States. The Home Depot plans to use them as new points of interaction with professional contractors (Pros). Many Pros visit Construction Resources’ showrooms prior to purchasing materials and for consultative services when taking on more complex jobs, The Home Depot says.

Home Depot ranks No. 4 in the Top 1000. The database is Digital Commerce 360’s ranking of North America’s online retailers by web sales.

Home Depot B2B growth via Construction Resources acquisition

In the near-term, The Home Depot plans to operate Construction Resources as a separate entity to learn about how the distributor’s showrooms can help it reach more Pros of all sizes.

“Pro is our largest growth opportunity,” a Home Depot spokesperson says. “And we’re building capabilities to serve Pros of all sizes.”

Long-term, The Home Depot expects the acquisition to bolster its share of the B2B market via Pros by combining Construction Resources’ expertise in complex, cross-category professional projects with its scale, product authority, and distribution capabilities. Home Depot declined to reveal what percentage of its sales come from Pros or by how much it is looking to increase its share of the Pro market.

“Almost all Pros interact with The Home Depot, but their level of engagement varies based on the complexity of their projects. We’re building capabilities to ensure we can serve all Pros across all their project needs — whether we’re the last stop on the way to the jobsite, or their first consideration when building a project design,” The Home Depot president and chief executive Ted Decker says in a statement. “Construction Resources helps us accelerate our Pro growth opportunity with a successful showroom model, an exceptional sales force, and proven, long-term relationships with renovator, remodeler and residential new-construction Pros.”

The Home Depot’s offerings for Pros include:

• Its ProXtra loyalty program
• Digital tools and personalized experiences
• A variety of fulfillment options
• A dedicated salesforce
• Value-added offerings such as credit, tool rental, and a quote center

Home Depot sales in its fiscal third quarter declined 3% to $37.7 billion. Total comparable sales declined 3.1%, and U.S. comparable sales declined 3.5%. Nearly half of online orders were fulfilled by stores, Home Depot said.

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