Home Depot Inc., Atlanta, has agreed to sell its wholesale distribution business, HD Supply, to a group of private equity firms.

Clayton Dubilier & Rice Inc., Bain Capital Partners and Carlyle Group will pay $10.3 billion for the business. The deal is expected to close by the end of October, with all three private equity firms investing equal amounts of equity in the transaction.

“HD Supply enjoys premium positions in an attractive $400+ billion market where we have deep experience and prior investment success,” said David A. Novak, partner, Clayton, Dubilier & Rice. “Working with our partners, as well as a strong management team, we are confident that we can achieve multiple strategic and operational improvements to enhance the company’s performance.”

Home Depot Supply’s 2006 acquisitions of Hughes Supply, Orlando, Fla., and Edson Electric Supply, Phoenix, rocked the electrical wholesaling industry. With nearly 1,000 locations nationwide and in Canada and 26,000 associates, HD Supply serves business-to-business customers such as homebuilders, municipalities and contractors in the construction, commercial, industrial, MRO, utility and public works markets. HD Supply had more than $12 billion in revenue last year, making up 14.7 percent of the total company's $81.5 billion in revenue for 2006.

The sale comes about a year after Home Depot bought Hughes Supply for $3.2 billion. In February, Home Depot began exploring alternatives for HD Supply in a move to increase its focus on its core retail business.