Lowe’s Companies has agreed to buy Foundation Building Materials (FBM) for about $8.8 billion.
FBM is a top distributor of interior building products in North America. Their products include drywall, metal framing, ceiling systems, commercial doors and hardware, insulation, and other related items. FBM serves large residential and commercial customers for both new construction and remodeling projects.
Since 2011, FBM has expanded through growth and acquisitions to become a leading player in the industry. They have over 370 locations in the U.S. and Canada, serving about 40,000 professional customers. In 2024, FBM expects to make around $6.5 billion in revenue and $635 million in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA). FBM has grown its revenue by about 25% and adjusted EBITDA by about 30% each year from 2019 to 2024.
This acquisition will enable Lowe’s to enhance its Total Home strategy by providing improved services to professional customers. They plan to do this by providing more capabilities, faster delivery, enhanced online tools, a strong trade credit program, and new sales opportunities between FBM and Lowe’s, as well as with the recently acquired Artisan Design Group. Combining these companies will help Lowe’s better meet the needs of large professional customers.
Ruben Mendoza, the president and CEO of FBM, will continue to lead the company with his senior team. They will work closely with Lowe’s to ensure quality service for their professional customers.
Lowe’s has secured $9 billion in financing from Bank of America and Goldman Sachs. They will utilize a combination of short-term and long-term debt to finance the acquisition, with the intention of maintaining their current credit ratings. The deal is expected to close in the fourth quarter of 2025, pending routine approvals, including regulatory approval.
Lowe’s also believes this acquisition will increase its earnings per share in the first full year after the deal closes, not counting any additional benefits from merging the companies.
Advisors: Goldman Sachs and Centerview Partners are acting as financial advisors to Lowe’s. Freshfields is acting as legal advisor to Lowe’s. RBC Capital Markets is acting as sole financial advisor to FBM. Weil, Gotshal & Manges is acting as legal advisor to FBM.
KEY QUOTES:
“With this acquisition, we are advancing our multi-year transformation of the Pro offering. It allows us to serve the large Pro planned spend within a $250 billion total addressable market and aligns perfectly with our Total Home strategy. FBM’s scalable, multi-trade distribution platform and strong leadership combined with our recent acquisition of ADG will significantly enhance our Pro offering. We’re excited to welcome the FBM team and strengthen our solutions for our growing Pro customers.”
Marvin R. Ellison, Lowe’s chairman, president, and CEO
“Joining Lowe’s is an exciting next step. Since 2011, we’ve built a leading position in drywall, ceiling systems, and metal framing, with proven success integrating acquisitions. Together with Lowe’s complementary products and incredible brand, we’ll offer a more comprehensive solution for Pro customers and accelerate growth.”
Ruben Mendoza, FBM’s president and CEO
