The news: Home Depot made a bid for GMS, a building products and tool supplier for both consumers and contractors, per The Wall Street Journal.

GMS operates more than 320 distribution centers, offering products such as wallboard, ceilings, steel framing, and other construction materials. It also has about 100 tool sales, rental, and service centers that cater to residential and commercial contractors.

The wrinkle in the plan: Home Depot isn’t the only suitor for GMS, which, as of Friday afternoon, had a market cap of $3.88 billion.

QXO, a distributor of roofing, waterproofing, and complementary building products, submitted an unsolicited proposal to buy GMS for about $5 billion.

Home Depot’s strategy: The home improvement retailer’s potential acquisition of GMS aligns with its broader push into the professional contractor market. That’s an appealing area for Home Depot because it offers more consistent demand than the DIY segment.

The potential move dovetails with Home Depot’s acquisitions of SRS Distribution and Construction Resources over the past few years. GMS’ offerings in drywall, ceilings, and framing would complement Home Depot’s existing portfolio and strengthen its competitive position against rivals like Lowe’s—which is also pushing deeper into the pro market—and independent building supply distributors.

Our take: Home Depot sees a significant opportunity to consolidate the fragmented construction supply and tool market—and it's moving at a moment when the US housing shortfall could drive sustained demand for new construction and renovation.