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Home Depot: Sale of supply division will close Thursday
Price of unit reduced to $8.5 billion

ATLANTA - The Home Depot Inc. said Tuesday it has agreed to sell its wholesale distribution business to private equity groups for $8.5 billion - about $1.8 billion less than originally agreed.

The announcement comes after several days of intense negotiations to preserve the deal, even at a lower price.

The sale price as announced in June was $10.3 billion. But tightening credit conditions and a rocky housing market led to renegotiation.

As part of the amended terms, Home Depot will purchase a 12.5 percent equity interest in the whole business for $325 million and will guarantee a $1 billion senior secured loan of HD Supply, a business that serves construction contractors.

The sale is scheduled to take place on Thursday.

The buyers include affiliates of Bain Capital Partners, the Carlyle Group and Clayton, Dubilier & Rice.