Filing Flows › Home Depot (HD) › Takeover & LBO
Is Home Depot (HD) a takeover target?
A leveraged buyout at today's price plus 30% ($454.92 a share) would return a loss of about 0% a year to a private-equity buyer over 5 years; the most a buyer could pay for a 20% return is $228.89 a share (−35% against today's $349.94). At $504.7B it would be larger than any buyout on record (the model flags anything over $60 billion), so this is a thought experiment more than a prospect. Historically 2.7% of companies with its figures were bought within a year (0.54× the average).
The buyout, step by step
| Entry | Amount | How |
|---|---|---|
| Offer price a share | $454.92 | today's $349.94 plus 30% |
| × shares | 996.0 million | |
| = Equity value | $453.1B | |
| + Debt refinanced | $53.6B | |
| − Cash | $2.1B | |
| = Enterprise value | $504.7B | 20.5× EBITDA of $24.7B |
| Fees | $10.1B | 2% of the price |
| New debt | $135.6B | 5.5× EBITDA at 7.65% a year; the limit that binds: 5.5× EBITDA |
| Buyer's own money | $379.2B | 74% of the cost |
5 years under the buyer
| Year | Revenue | EBITDA | Interest | Free cash flow | Debt left |
|---|---|---|---|---|---|
| Year 1 | $173.4B | $25.3B | $10.4B | $8.0B | $127.6B |
| Year 2 | $177.9B | $25.9B | $9.8B | $8.9B | $118.7B |
| Year 3 | $182.8B | $26.6B | $9.1B | $9.8B | $108.9B |
| Year 4 | $188.1B | $27.4B | $8.3B | $10.8B | $98.1B |
| Year 5 | $193.7B | $28.2B | $7.5B | $12.0B | $86.1B |
The exit and the buyer's return
| Exit | Amount | |
|---|---|---|
| Exit multiple | 16.2× EBITDA | today's trading multiple, before any premium |
| Enterprise value at exit | $458.2B | |
| − Debt left | $86.1B | |
| = Buyer's equity | $372.1B | |
| Money multiple | 0.98× | on $379.2B put in |
| Buyer's yearly return (IRR) | −0.4% |
Price against return
What the buyer makes at other premiums over today's $349.94; the IRR reaches 20% at $228.89 a share.
| Premium | Price a share | Buyer's IRR |
|---|---|---|
| 10% | $384.93 | 3.8% |
| 20% | $419.93 | 1.6% |
| 30% | $454.92 | −0.4% |
| 40% | $489.92 | −2.1% |
| 50% | $524.91 | −3.7% |
The figures used
| Figure | Amount | |
|---|---|---|
| Revenue, last 12 months | $169.2B | |
| EBITDA, last 12 months | $24.7B | 14.6% of revenue |
| Depreciation and amortization | $3.6B | |
| Capital spending | $3.7B | |
| Debt | $53.6B | |
| Cash | $2.1B | |
| Share price | $349.94 | on Nov 6, 2026 |
Fixed rules, the same as the interactive view's starting point: the shares are bought at today's price plus 30%, the company's debt is refinanced and fees take 2%. New debt is the least of 5.5× EBITDA, 65% of the price and the amount whose interest EBITDA covers 2 times, at 7.65% a year (SOFR 3.89% plus the high-yield B spread 3.26% plus 0.5%, rates of Oct 15, 2026). Revenue grows 2.5% in the first year — the company's own rate, held between −3% and +8% — fading to 3% by year 5; the EBITDA margin, depreciation and capital spending stay at today's share of revenue; working capital takes 10% of each year's added revenue; tax is 24% of profit after interest. Every dollar of free cash flow repays debt. After 5 years the buyer sells at today's multiple of EBITDA.
What a takeover could cost
Takeovers on record paid a median premium of 32.5% over the share price before the deal (the middle half 20% to 51.8%), according to the 1,437 merger proxies and tender-offer responses on EDGAR that state a premium. At the median, Home Depot would cost about $463.67 a share, $461.8B for all its shares.
| Premium | % | Price a share | All shares |
|---|---|---|---|
| Low end (a quarter of deals paid less) | 20% | $419.93 | $418.2B |
| Median | 32.5% | $463.67 | $461.8B |
| High end (a quarter paid more) | 51.8% | $531.21 | $529.1B |
The odds, from history
Historically 2.7% of companies with its figures were bought within a year (0.54× the average). Its figures put it in decile 2 of 10 (10 = the most likely to be bought). The odds come from a model of every merger proxy, tender-offer response and going-private statement filed on EDGAR since 2011, set against each company's size, margins, debt, cash flow and growth the year before.
Home Depot's latest quarter
Home Depot, Q2 FY27: revenue $47.9B (+6% year over year), operating margin 14.3%, net earnings $4.8B, operating cash flow $5.4B. The chart follows the revenue to costs, profit and cash.
Questions
Is Home Depot being acquired?
No headline, 8-K or 13D about a sale is on file in the last year.
Could private equity buy Home Depot?
A leveraged buyout at today's price plus 30% ($454.92 a share) would return a loss of about 0% a year to a private-equity buyer over 5 years; the most a buyer could pay for a 20% return is $228.89 a share (−35% against today's $349.94). At $504.7B it would be larger than any buyout on record (the model flags anything over $60 billion), so this is a thought experiment more than a prospect.
What would a takeover of Home Depot cost?
Takeovers on record paid a median premium of 32.5% over the share price before the deal (the middle half 20% to 51.8%), according to the 1,437 merger proxies and tender-offer responses on EDGAR that state a premium. At the median, Home Depot would cost about $463.67 a share, $461.8B for all its shares.
Updated Nov 8, 2026. Read automatically from SEC filings and public data; errors are possible. Not investment advice.