Lowes to acquire Foundation Building Materials for US$8.8B

Key Takeaways:

• Lowe’s Companies Inc. has agreed to acquire Foundation Building Materials (FBM) for US$8.8 billion in cash, a move aimed at expanding its services for professional contractors in North America.
• FBM, which operates more than 370 locations in Canada and the United States, generated about US$6.5 billion in revenue in 2024 and will continue to be led by its current president and CEO, Ruben Mendoza.
• The acquisition, expected to close in late 2025 pending regulatory approvals, will be financed through a mix of short- and long-term debt and is projected to boost Lowe’s earnings in its first full year after closing.

The Whole Story:

Lowe’s Companies Inc. says it has reached a deal to acquire Foundation Building Materials (FBM) in a transaction valued at about US$8.8 billion.

FBM distributes drywall, ceiling systems, insulation, metal framing and other interior construction materials to large residential and commercial contractors. The company operates more than 370 locations across the United States and Canada, serving roughly 40,000 professional customers.

In 2024, FBM reported about US$6.5 billion in revenue and US$635 million in adjusted earnings before interest, taxes, depreciation and amortization.

Lowe’s says the purchase will expand its offerings for professional contractors, a key growth area for the home improvement retailer. The North Carolina-based company has been working to build out its so-called “Total Home” strategy, which includes faster fulfillment, more digital tools, enhanced trade credit options and stronger cross-selling opportunities.

“This acquisition allows us to serve the large Pro planned spend within a US$250-billion total addressable market and aligns perfectly with our Total Home strategy,” Lowe’s chairman and chief executive Marvin Ellison said in a statement.

FBM president and CEO Ruben Mendoza said joining Lowe’s will allow the company to accelerate growth while continuing to provide service to professional contractors. Mendoza and his senior leadership team will stay on following the deal.

Lowe’s will pay cash for the acquisition and has secured US$9 billion in bridge financing from Bank of America and Goldman Sachs. The company says it expects to use a mix of short- and long-term debt to finance the purchase while maintaining its credit ratings.

The transaction, subject to regulatory approvals and closing conditions, is expected to close in the fourth quarter of 2025. Lowe’s says it expects the deal to be accretive to adjusted diluted earnings per share in the first full year after closing.