HD Supply Holdings, Inc. announced its intention to separate its Facilities Maintenance and Construction & Industrial businesses into two independent publicly traded companies through a distribution, which is expected to be tax-free to HD Supply shareholders for U.S. tax purposes. The separation is expected to be completed by the middle of fiscal 2020. Both Facilities Maintenance and Construction & Industrial are leaders in their respective industries and operate largely as independent companies given the lack of customer and operational overlap. Following completion of the separation, each company is expected to be well-capitalized, generate strong free cash flow and be well-positioned for future growth. HD Supply believes that as two independent companies, each business will be better able to: Position itself within its industry as a focused, independent company; Pursue both organic growth and acquisition opportunities aligned with its strategic priorities; Create a more optimal capital structure and capital allocation consistent with its own independent financial profile; and Align incentive compensation with financial performance. A leading Maintenance, Repair and Operations solution provider, the Facilities Maintenance business will continue to focus on providing MRO products, value-add services and custom products to multifamily, hospitality, healthcare and institutional property owners and managers. Facilities Maintenance operates a distribution center-based model and sells its products primarily through a professional sales force, e-commerce and print catalogs. The company intends to retain the HD Supply name and ticker symbol. HD Supply Facilities Maintenance generated approximately $3 billion in Net sales in fiscal 2018, ended February 3, 2019. Construction & Industrial-White Cap business will continue to serve as a one-stop shop providing concrete accessories and chemicals, tools and equipment, building materials and fasteners, erosion and waterproofing and safety products to professional contractors by meeting their distinct and customized supply needs in non-residential, residential and industrial applications. Construction & Industrial generated approximately $3 billion in Net sales in fiscal 2018, ended February 3, 2019.

The company also announced that DeAngelo, Chairman and CEO, HD Supply, is expected to serve as Chairman and CEO, HD Supply Facilities Maintenance; Evan Levitt, currently CFO and Chief Administrative Officer of HD Supply, is expected to serve in the same capacity for HD Supply Facilities Maintenance; and Brad Paulsen, currently President of Facilities Maintenance, is also expected to serve in the same capacity after the separation. John Stegeman, currently President of Construction & Industrial, is expected to serve as CEO, and Alan Sollenberger, currently Chief Operating Officer of Construction & Industrial, is expected to serve in the same capacity after the separation.