Lowe’s Companies has finalized its $8.8 billion cash acquisition of Foundation Building Materials, one of the largest deals in home improvement retail history, closing in under two months from announcement in late August 2025 to early October.
This swift transaction catapults Lowe’s deeper into the $250 billion professional contractor market, where margins exceed those of consumer do-it-yourself sales.
Strategic Push into Contractor Segment
The purchase intensifies rivalry with Home Depot, which recently bought GMS for $5.5 billion after its $18 billion acquisition of SRS Distribution. Both retailers aim to dominate the professional builder space amid softening DIY demand, which makes up about 70% of Lowe’s revenue.
Foundation Building Materials brings a robust network of over 370 branches across the U.S. and Canada, serving 40,000 customers with products like drywall, metal framing, ceiling systems, insulation, and commercial doors. In 2024, it posted $6.5 billion in revenue and $635 million in EBITDA, with a five-year revenue growth rate of 25% annually.
Lowe’s CEO Marvin Ellison described the deal as advancing the company’s multi-year transformation of its professional offerings, aligning with the Total Home strategy to capture planned contractor spending in the vast market.
FBM’s Network and Leadership Continuity
FBM will operate under its own brand, led by founder and CEO Ruben Mendoza and his senior team, who bring over 200 years of industry experience. Mendoza built the company since 2011 through organic expansion and buys like Beacon Roofing Supply’s interior unit, Marjam Supply, Unified Door & Hardware, and REW Materials.
The acquisition adds cutting-edge digital tools, including the MyFBM app for real-time pricing, ordering, and delivery tracking in English and Spanish. FBM’s AI-driven Blueprint Takeoff software extracts material quantities from digital plans, slashing estimation time from weeks to minutes.
It also bolsters Lowe’s footprint in key regions like California, the Northeast, and Midwest, enabling cross-selling between overlapping products and customers.
Digital Tools and Geographic Reach
This marks Lowe’s second major 2025 buy, after the $1.33 billion Artisan Design Group purchase in April. ADG handles design, distribution, and installation of flooring, cabinets, and countertops for homebuilders and managers.
Merging FBM and ADG forms an end-to-end platform for contractors, from digital estimating and sourcing to fulfillment and installation of interior elements like drywall, ceilings, flooring, and cabinets.
J.P. Morgan analyst Christopher Horvers noted the urgency in professional distribution acquisitions is evidently intensifying as competition heats up.
Financial Details and Market Drivers
Funded by $9 billion in bridge financing from Bank of America and Goldman Sachs, plus debt, the deal carries a 13.4 times adjusted EBITDA multiple. Lowe’s paused share buybacks to hit its leverage target but expects accretion to adjusted earnings per share in the first full year, excluding synergies.
The company lifted its annual sales outlook to $84.5 billion-$85.5 billion from $83.5 billion-$84.5 billion. Executives point to 18 million new U.S. homes needed by 2033 and $50 billion in deferred projects, plus housing recovery, as growth fuel.
Previously owned by American Securities and Clayton, Dubilier & Rice since 2021, FBM saw 27% annual revenue growth and 31% EBITDA growth under them. Quick regulatory nods enabled the fast close.
It expands trade credit for contractors, pairs with faster delivery and broader assortments, and suits large-scale residential and commercial work.
Competitive Landscape and Future Outlook
Lowe’s second-quarter results beat expectations, with $24 billion in sales, 1.1% comparable growth, 7.5% online rise, and adjusted EPS of $4.33 versus $4.24 forecast.
GlobalData’s Neil Saunders called the professional segment the new battleground for home improvement giants, foreseeing intense competition in a fragmented market with room for gains by both retailers.
As retailers consolidate specialized distributors, the stakes rise for capturing professional spend, with integrated digital-physical solutions reshaping contractor services across North America.
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.