Lowe’s has revealed that it has finalized its acquisition of Foundation Building Materials (FBM) for $8.8 billion. FBM is a California-based distributor that is well known for the breadth of building materials and supplies it holds for use in construction and home improvement. The transaction is a major milestone for the North Carolina–based retailer as it expands its footprint into the professional contractor customer segment.
Lowe’s Continues its “Total Home” Strategy
Lowe’s chairman, president and CEO Marvin R. Ellison referred to the acquisition as a strategic part of the company’s long-term growth opportunity: “We have completed the acquisition of FBM, which is an important step which will help accelerate our Total Home strategy to better serve large Pro customers in a Total Addressable Market of $250 billion.” In his comments, Mr. Ellison also stated that Lowe’s looks forward to welcoming the employees of FBM and support their proven track record of profitable growth.
Lowe’s “Total Home” strategy is designed to ensure that they offer everything their customers may need under one roof, expanding their offerings from building materials and tools to architectural design and installation services. This acquisition is aimed at creating a better solution for professional contractors and strengthen Lowe’s position versus other competitors, such as Home Depot.
Who Is Foundation Building Materials?
Established in 2011, FBM has quickly grown into a premier supplier of construction materials throughout North America. The company has a presence of over 370 locations across the United States and Canada. Its offerings include drywall, metal framing, insulation, ceiling systems, hardware, fasteners, commercial doors, and power tools, all of which serve as critical supplies for commercial and residential construction.
FBM will continue to be operated as a separate business unit after the transaction, and Ruben Mendoza will remain a leader of the company. Lowe’s is excited to leverage FBM’s established technical expertise and relationships with customers and enhance its overall business plans.
A Broader Growth Vision
Lowe’s bought FBM just months after it acquired Artisan Design Group (ADG), a national supplier of design, distribution, and installation services regarding interior surface finishes. Both acquisitions demonstrate Lowe’s desire to diversify and grow its offerings outside of a retail setting.
“With these acquisitions, Lowe’s will be well-positioned to build our market penetration and take advantage of an anticipated recovery in housing, with an anticipated need for 16 million new homes in the U.S. by 2033,” Ellison said. Ellison noted that building Lowe’s professional customer base will help drive more consistent sales, stronger profit margins, and long-term shareholder value.
Looking Ahead
This acquisition reflects a dedication to a dynamic future for Lowe’s as it evolves with changing market demands. In light of a sluggish housing recovery and increased demand for larger building products, Lowe’s acquisition of FBM serves to enhance Lowe’s capacity to better serve the evolving needs of builders and contractors throughout North America.
By joining professional focus with retail capabilities of the distribution model, Lowe’s is determined to be considered a home improvement retailer, while being a full service partner in the building supply ecosystem.
