Lowe's to Acquire Foundation Building Materials for $8.8 Billion, Expanding Distribution Capabilities.

Foundation Building Materials, a North American distributor of interior building products, is being sold to Lowe's for $8.8 billion. The company, owned by American Securities and CD&R, has experienced 27% annual revenue growth and 31% EBITDA growth under their ownership. The sale is a testament to the value of strategic partnerships and innovative initiatives.

Lowe's Companies, Inc. (NYSE: LOW) has announced a definitive agreement to acquire Foundation Building Materials (FBM) for approximately $8.8 billion. The deal, expected to close in the fourth quarter of 2025, will significantly enhance Lowe's offering to professional customers, known as "Pro customers."

FBM, a leading North American distributor of interior building products, including drywall, metal framing, ceiling systems, commercial doors, and hardware, has seen substantial growth under its current ownership. With a network of over 370 locations across the U.S. and Canada, FBM serves 40,000 Pro customers. The company generated approximately $6.5 billion in revenue and $635 million in adjusted EBITDA in 2024, reflecting a 25% and 30% compound annual growth rate (CAGR) for revenue and adjusted EBITDA, respectively, from 2019 to 2024 [1].

The acquisition aligns with Lowe's Total Home strategy, which aims to serve the large Pro segment within a $250 billion total addressable market. Lowe's expects the acquisition to be accretive to adjusted diluted earnings per share in the first full year post-closing, excluding synergies. The transaction is expected to close in the fourth quarter of 2025, subject to customary closing conditions, including regulatory approval [1].

Lowe's will acquire FBM for $8.8 billion in cash, reflecting an adjusted EBITDA multiple of 13.4x. The company has secured $9.0 billion in a fully committed bridge financing from Bank of America, N.A. and Goldman Sachs & Co. LLC. Lowe's intends to finance the acquisition through a combination of short-term and long-term debt and maintain its current credit ratings [1].

Ruben Mendoza, FBM's president and CEO, and the senior leadership team will continue to lead FBM. The FBM team will collaborate closely with Lowe's to provide outstanding service for their Pro customers. The acquisition is expected to accelerate Lowe's Total Home strategy by enhancing its offering to Pro customers through expanded capabilities, faster fulfillment, improved digital tools, a robust trade credit platform, and significant cross-selling opportunities between FBM and Lowe's as well as the recently acquired Artisan Design Group [1].

The transaction is subject to customary closing conditions, including regulatory approval. Lowe's will conduct a conference call to discuss its second quarter 2025 earnings and the FBM acquisition at 9 a.m. Eastern time today [1].

References:
[1] https://corporate.lowes.com/newsroom/press-releases/lowes-announces-agreement-acquire-foundation-building-materials-leading-north-american-distributor-interior-building-products-08-20-25