Lowe's Merges with Foundation Building Materials for $8.8 Billion

Lowe's (LOW) is acquiring Foundation Building Materials (FBM) for $8.8 billion, accelerating its Total Home strategy and offering customers faster fulfillment and improved digital tools. The deal is expected to close in Q4, and the company raised its full-year sales outlook to $84.5 billion to $85.5 billion. Neil Saunders of GlobalData notes that the professional builder market provides a growth opportunity to Lowe's, but it faces competition from Home Depot (HD).

Lowe's Companies, Inc. (NYSE: LOW) has announced a definitive agreement to acquire Foundation Building Materials (FBM) for approximately $8.8 billion. The acquisition, expected to close in the fourth quarter of 2025, aims to enhance Lowe's Total Home strategy by expanding its offerings to professional customers (Pro customers) and increasing market penetration in the professional builder segment.

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

The acquisition is expected to accelerate Lowe's Total Home strategy by providing faster fulfillment, improved digital tools, and a robust trade credit platform. It also presents significant cross-selling opportunities between FBM and Lowe's, as well as the recently acquired Artisan Design Group. The combined companies aim to create a premier platform to better serve large Pro customers, especially in planned spend.

Marvin R. Ellison, Lowe's chairman, president, and CEO, stated, "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" [1].

Ruben Mendoza, FBM's president and CEO, added, "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" [1].

Lowe's expects the acquisition to be accretive to adjusted diluted earnings per share in the first full year post-closing, excluding synergies. The company has secured $9.0 billion in fully committed bridge financing from Bank of America, N.A. and Goldman Sachs & Co. LLC to finance the deal [1].

Neil Saunders of GlobalData notes that the professional builder market provides a growth opportunity for Lowe's, but it faces competition from Home Depot (HD) [2].

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
[2] https://www.globaldata.com/press-release/lowes-acquires-foundation-building-materials