Lowe’s Companies has successfully completed its $8.8 billion cash acquisition of Foundation Building Materials (FBM), marking one of the largest transactions in home improvement retail history.
The deal, announced in August 2025 and finalized by early October, took less than two months to close—an exceptionally fast timeline for an acquisition of this magnitude.
Strategic Power Play Against Home Depot
The acquisition represents Lowe’s aggressive push into the lucrative professional contractor market valued at $250 billion, intensifying competition with rival Home Depot.
This move came shortly after Home Depot acquired specialty building products distributor GMS for $5.5 billion, signaling an industry-wide battle for professional builder market share that traditionally accounts for higher margins than do-it-yourself consumer sales.
FBM’s Impressive Distribution Network
Foundation Building Materials operates more than 370 branches across the United States and Canada, serving approximately 40,000 professional customers with interior building products including drywall, metal framing, ceiling systems, insulation, and commercial doors.
The company generated $6.5 billion in revenue and $635 million in EBITDA in 2024, boasting an impressive five-year revenue compound annual growth rate of 25%.
CEO Announces Strategic Vision
Lowe’s CEO Marvin Ellison emphasized the transformative nature of the deal, stating: “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.” The acquisition accelerates Lowe’s “Total Home strategy” to capture professional contractor spending.
FBM Leadership Remains Intact
Foundation Building Materials will continue operating under its existing brand with founder and CEO Ruben Mendoza leading the company alongside his senior management team. Mendoza expressed enthusiasm about the partnership, stating: “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.”
Digital Capabilities Drive Value
The acquisition brings advanced digital tools to Lowe’s professional customers, including FBM’s MyFBM mobile app offering real-time pricing, ordering, and delivery tracking in English and Spanish.
Additionally, FBM’s AI-powered Blueprint Takeoff software automatically extracts material quantities from digital construction plans, revolutionizing project estimation processes and reducing weeks of manual labor to mere minutes.
Geographic Expansion Strengthens Market Position
FBM provides Lowe’s with enhanced presence in critical markets including California, the Northeast, and the Midwest, areas where the retailer previously had limited professional contractor penetration.
This geographic expansion creates substantial cross-selling opportunities between the companies’ complementary product lines and customer bases, positioning Lowe’s to compete more effectively across North America.
Second Major Acquisition of 2025
The FBM deal represents Lowe’s second significant acquisition in 2025, following its $1.33 billion purchase of Artisan Design Group (ADG) in April.
ADG provides design, distribution, and installation services for interior finishes including flooring, cabinets, and countertops to homebuilders and property managers. Together, these acquisitions create a comprehensive interior solutions platform for professional contractors.
Comprehensive Interior Solutions Platform
By combining FBM and Artisan Design Group, Lowe’s has created an end-to-end service offering for homebuilders and commercial contractors spanning from digital estimating and materials sourcing to fulfillment and installation.
This integrated approach positions the company to provide everything from drywall and ceiling systems to flooring, cabinets, and countertops through seamless digital and physical experiences.
Analyst Highlights Industry Urgency
J.P. Morgan analyst Christopher Horvers captured the competitive intensity, noting: “The urgency for acquisitions in the professional distributors sector is evidently intensifying, which we anticipate will become a focal point as competition escalates.”
This statement underscores how both major home improvement retailers are racing to consolidate the fragmented professional distribution market before competitors can secure key assets.
Market Opportunity Drives Growth Strategy
Lowe’s executives cite significant market opportunities justifying the acquisition, including an estimated 16 million new homes needed in the United States by 2033 and approximately $50 billion in deferred home improvement projects.
CEO Ellison stated the company expects to “capitalize on the expected recovery in housing” while driving “more sustainable sales and profit expansion.”
Financial Structure and Impact
Lowe’s funded the $8.8 billion acquisition through a combination of short-term and long-term debt, with Bank of America and Goldman Sachs providing $9 billion in fully committed bridge financing. The company paused share repurchases until reaching its target leverage ratio.
The deal reflects an adjusted EBITDA multiple of 13.4 times, which analysts consider reasonable compared to competitor valuations.
Earnings Accretive in First Year
The transaction is expected to be accretive to Lowe’s adjusted earnings per share in its first full year, excluding synergies, according to company statements.
Following the announcement, Lowe’s raised its annual sales forecast to between $84.5 billion and $85.5 billion, up from a previous estimate of $83.5 billion to $84.5 billion, signaling confidence in immediate financial benefits.
Professional Market Battle Intensifies
Both Lowe’s and Home Depot are aggressively pursuing acquisitions to strengthen positions in the professional builder market, especially as DIY sales—which account for approximately 70% of Lowe’s revenue—have been declining.
Home Depot had previously acquired building materials supplier SRS Distribution for over $18 billion and GMS for approximately $5.5 billion, demonstrating the high stakes of this competitive landscape.
Private Equity Exit Success
FBM was owned by private equity firms American Securities and Clayton, Dubilier & Rice (CD&R) prior to the Lowe’s acquisition. Under their ownership since 2021, FBM experienced exceptional growth with 27% annual revenue growth and 31% annual EBITDA growth.
The $8.8 billion exit represents a highly successful investment for both private equity sponsors.
Rapid Regulatory Approval Process
The acquisition received necessary regulatory approvals remarkably quickly, with the deal closing in early October 2025 after being announced in late August.
This expedited timeline, taking less than two months from announcement to completion, demonstrates the strategic importance both companies placed on finalizing the transaction and integrating operations before the end of calendar year 2025.
Enhanced Trade Credit Platform
The acquisition provides Lowe’s professional customers with an expanded trade credit platform, addressing a critical need for contractors managing cash flow across multiple projects.
Combined with faster fulfillment, expanded product assortment, and enhanced digital tools, the integrated offering positions Lowe’s to serve larger professional contractors undertaking complex commercial and residential construction projects more comprehensively.
Founder’s Entrepreneurial Success Story
Ruben Mendoza founded Foundation Building Materials in 2011 and grew it into an industry-leading distributor through organic growth and strategic acquisitions including Beacon Roofing Supply’s interior products business, Marjam Supply Company, Unified Door & Hardware, and REW Materials.
His leadership team collectively brings over 200 years of combined industry experience, which will continue guiding FBM under Lowe’s ownership.
Strong Second Quarter Performance
The acquisition announcement coincided with Lowe’s reporting second-quarter earnings that exceeded Wall Street expectations, with adjusted earnings per share of $4.33 surpassing analyst forecasts of $4.24.
Second-quarter sales reached $24 billion with comparable sales up 1.1%, while online sales rose 7.5%, demonstrating momentum across both digital and physical channels as the company executed its transformation strategy.
Future Industry Transformation
Industry experts anticipate the professional contractor segment will become increasingly consolidated as major retailers acquire specialized distributors to offer comprehensive solutions.
Neil Saunders, managing director of GlobalData, noted that “Pro is basically the new battleground for home improvement,” predicting “bruising battles ahead” while believing “the market is big enough and fragmented enough to allow both players to extract some wins.”
Sources:
“Lowe’s to buy Foundation Building Materials for $8.8 billion to boost contractor business.” Reuters, August 2025.
“Lowe’s (LOW) Q2 2025 earnings.” CNBC, August 20, 2025.
“Lowe’s closes on deal to acquire Foundation Building Materials.” Retail Dive, October 9, 2025.
“Lowe’s $8.8 billion acquisition Foundation Building Materials.” Digital Commerce 360, August 20, 2025.
“Foundation Building Materials, Building Products Distribution Company owned by American Securities and CD&R, to be acquired by Lowe’s.” American Securities, August 2025.