Lowe's Acquires FBM for $88 Billion, Boosting Professional Market Presence

Lowe's Companies, Inc., a prominent home improvement retailer in the United States, has announced a significant acquisition of Foundation Building Materials (FBM) for $88 billion. This deal marks the largest acquisition in Lowe's history and is set to be completed through a combination of short-term and long-term debt financing, including a $90 billion bridge loan commitment.

FBM operates over 370 locations across the United States and Canada, serving approximately 40,000 professional customers. The company offers a wide range of products, including gypsum board, insulation materials, metal framing, suspended ceiling systems, commercial doors, hardware, and related building materials. In 2024, FBM achieved $65 billion in revenue, with an adjusted EBITDA of $6.35 billion.

The acquisition is expected to close in the fourth quarter and is anticipated to contribute to Lowe's profit growth in the first fiscal year post-closing. From a balance sheet perspective, Lowe's expects its leverage ratio to rise to 3.4-3.5 times upon completion of the deal. The company plans to temporarily suspend stock buybacks and aims to reduce the leverage ratio to 2.75 times by the end of the second quarter of 2027.

Analysts have responded positively to the news, highlighting the strategic benefits of the acquisition. The deal is seen as a significant move to expand into the professional distribution market, which is becoming increasingly competitive. The acquisition of FBM is expected to provide Lowe's with a broader product portfolio, improved digital tools, and enhanced trade credit programs, all of which will benefit both new construction and renovation markets.

The acquisition is also expected to create substantial cross-selling opportunities, allowing Lowe's to offer more comprehensive solutions to its professional customers. This move is part of Lowe's broader strategy to strengthen its position in the professional market segment, which is known for higher sales volumes and repeat business. Analysts believe that Lowe's may continue to pursue similar strategic acquisitions in the future to further bolster its market position and operational efficiency.