LOWE'S ANNOUNCES AGREEMENT TO ACQUIRE FOUNDATION BUILDING MATERIALS, A LEADING NORTH AMERICAN DISTRIBUTOR OF INTERIOR BUILDING PRODUCTS

Rhea-AI Summary

Lowe's (NYSE:LOW) has announced a definitive agreement to acquire Foundation Building Materials (FBM) for $8.8 billion in cash. FBM is a leading North American distributor of interior building products with over 370 locations serving 40,000 Pro customers across the US and Canada.

FBM generated $6.5 billion in revenue and $635 million in adjusted EBITDA in 2024, with impressive growth rates of 25% revenue CAGR and 30% adjusted EBITDA CAGR from 2019 to 2024. The acquisition, expected to close in Q4 2025, will be financed through short-term and long-term debt, with $9.0 billion in committed bridge financing from Bank of America and Goldman Sachs.

The strategic acquisition enhances Lowe's Total Home strategy by expanding its Pro customer offerings and creates significant cross-selling opportunities with both FBM and the recently acquired Artisan Design Group. The transaction is expected to be accretive to adjusted diluted EPS in the first full year post-closing.

Positive

• Transaction valued at $8.8B provides access to $250B total addressable market
• FBM demonstrated strong growth with 25% revenue CAGR and 30% EBITDA CAGR (2019-2024)
• Acquisition expected to be accretive to adjusted EPS in first full year
• Expands Pro customer base with 40,000 additional professional customers
• Extensive distribution network of 370+ locations across US and Canada
• Creates significant cross-selling opportunities with existing Lowe's business

Negative

• Significant debt financing required with $9.0B bridge loan
• High acquisition multiple of 13.4x adjusted EBITDA
• Integration risks with large-scale acquisition
• Increased leverage could impact current credit ratings

Insights

M&A Strategist

Lowe's $8.8B FBM acquisition strengthens Pro customer strategy, expands market reach, and promises immediate earnings accretion.

Lowe's $8.8 billion acquisition of Foundation Building Materials (FBM) represents a strategic pivot toward capturing a larger share of the professional contractor market. This deal values FBM at approximately 13.4x adjusted EBITDA, which appears reasonable given FBM's impressive growth trajectory—25% revenue CAGR and 30% EBITDA CAGR from 2019-2024.

The acquisition targets a critical gap in Lowe's business model. While Lowe's has traditionally served DIY consumers effectively, it has lagged behind competitors like Home Depot in penetrating the more lucrative professional contractor segment. FBM brings immediate access to 40,000 Pro customers through its network of over 370 locations across North America, significantly expanding Lowe's professional customer base.

FBM's $6.5 billion in annual revenue and $635 million in adjusted EBITDA provide Lowe's with immediate scale in the professional space. The company specializes in high-margin interior building materials including drywall, metal framing, and ceiling systems—products that complement Lowe's existing offerings without significant overlap.

This acquisition, combined with the recently acquired Artisan Design Group, creates a more comprehensive ecosystem for professional contractors. The strategic value lies in creating a one-stop solution for professionals managing planned spending projects—a $250 billion total addressable market that Lowe's had previously underserved.

The decision to retain FBM's leadership team, including CEO Ruben Mendoza, suggests Lowe's is taking a hands-off approach to integration, preserving FBM's established customer relationships and operational expertise while leveraging Lowe's scale and resources. This approach typically minimizes integration risks while maximizing the potential for cross-selling opportunities.

Financially, the transaction is expected to be accretive to adjusted earnings per share in the first full year post-closing, even before accounting for potential synergies—a positive indicator for shareholder value creation. However, the $9 billion bridge financing will significantly increase Lowe's debt load, although the company expects to maintain its current credit ratings through a combination of short and long-term debt financing.

Financial Analyst

Lowe's $8.8B acquisition targets high-growth Pro segment, with immediate EPS accretion and reasonable valuation despite debt increase.

Lowe's acquisition of Foundation Building Materials at $8.8 billion represents a 13.4x multiple on FBM's $635 million adjusted EBITDA. This valuation appears reasonable for a business demonstrating exceptional growth—25% revenue CAGR and 30% EBITDA CAGR over five years—particularly in the relatively stable building materials distribution sector.

FBM's financial profile is compelling. With $6.5 billion in annual revenue, the acquisition immediately adds approximately 8-9% to Lowe's top line. More importantly, FBM's higher-margin business model should positively impact Lowe's overall margin profile. The accelerating EBITDA growth (30% CAGR) outpacing revenue growth (25% CAGR) indicates operational leverage and efficiency improvements within FBM's business model.

The transaction structure—all-cash consideration funded through debt—will significantly impact Lowe's balance sheet. The $9 billion committed bridge financing represents a substantial increase in Lowe's debt obligations. However, management's confidence in maintaining current credit ratings suggests they have a clear deleveraging plan, likely involving a combination of free cash flow allocation and potential synergies.

The expected EPS accretion in the first full year post-closing, even before accounting for synergies, indicates the acquisition's immediate financial benefits. This positive impact on per-share earnings suggests the return on invested capital exceeds Lowe's weighted average cost of capital, creating shareholder value from day one.

The complementary nature of FBM's business—focusing on interior building products for professional customers—presents significant cross-selling opportunities with Lowe's existing product lines and the recently acquired Artisan Design Group. These operational synergies, while not quantified in the announcement, represent potential upside beyond the stated financial projections.

From a strategic financial perspective, this acquisition enables Lowe's to deploy capital toward higher-growth market segments, potentially improving its long-term growth profile and valuation multiple. By increasing exposure to the professional contractor segment, Lowe's may achieve more consistent performance throughout housing market cycles, as professional renovation work tends to be less discretionary than DIY projects.

--Enhances offering for Pro customers—
--Increases Pro Penetration¹--
--Positions Company for Long-Term Sustainable Sales Growth and Profit Expansion--

MOORESVILLE, N.C., Aug. 20, 2025 /PRNewswire/ -- Lowe's Companies, Inc. ("Lowe's" or the "Company") (NYSE: LOW) today announced it has entered into a definitive agreement (the "Agreement") to acquire Foundation Building Materials ("FBM") for approximately $8.8 billion.

FBM is a leading North American distributor of interior building products, including drywall, metal framing, ceiling systems, commercial doors and hardware, insulation and complementary products serving large residential and commercial professionals in both new construction and repair and remodel applications. Since 2011, FBM has grown organically and inorganically to become an industry leader, with a network of over 370 locations in the United States and Canada serving 40,000 Pro customers. In 2024, on a pro forma basis, FBM generated approximately $6.5 billion in revenue and $635 million in adjusted EBITDA². It generated approximately 25% and 30% CAGR for revenue and adjusted EBITDA, respectively, from 2019 to 2024.

FBM is expected to accelerate Lowe's Total Home strategy by enhancing its offering to Pro customers through expanded capabilities, faster fulfillment, improved digital tools, a robust trade credit platform, and significant cross-selling opportunities between FBM and Lowe's as well as the recently acquired Artisan Design Group. By combining these acquisitions with Lowe's existing offering, the Company will create a premier platform to better serve the large Pro, especially in planned spend.

"With this acquisition, we are advancing our multi-year transformation of the Pro offering," said Marvin R. Ellison, Lowe's chairman, president, and CEO. "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. FBM's scalable, multi-trade distribution platform and strong leadership combined with our recent acquisition of ADG will significantly enhance our Pro offering. We're excited to welcome the FBM team and strengthen our solutions for our growing Pro customers."

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."

Ruben Mendoza and the senior leadership team will continue to lead FBM. The FBM team will collaborate closely with Lowe's to continue to provide outstanding service for their Pro customers.

Financial Overview
Under the terms of the Agreement, Lowe's will acquire FBM for $8.8 billion in cash, which reflects an adjusted EBITDA multiple of 13.4x^2,3.

The Company has secured $9.0 billion in a fully committed bridge financing from Bank of America, N.A. and Goldman Sachs & Co. LLC.

Lowe's expects to finance the acquisition through a combination of short-term and long-term debt and intends to maintain its current credit ratings. The transaction is expected to close in the fourth quarter of 2025, subject to customary closing conditions, including regulatory approval.

The transaction is expected to be accretive to adjusted diluted earnings per share in the first full year, post-closing, excluding synergies.

Conference Call
At 9 a.m. Eastern time today, Lowe's will conduct a conference call to discuss its second quarter 2025 earnings and the FBM acquisition. A webcast as well as an accompanying presentation will be available by visiting Lowe's Investor Relations website at ir.lowes.com.

Advisors
Goldman Sachs & Co. LLC and Centerview Partners LLC are acting as financial advisors to Lowe's. Freshfields LLP is acting as legal advisor to Lowe's. RBC Capital Markets is acting as sole financial advisor to FBM. Weil, Gotshal & Manges LLP is acting as legal advisor to FBM.

About Lowe's
Lowe's Companies, Inc. (NYSE: LOW) is a FORTUNE® 100 home improvement company serving approximately 16 million customer transactions a week in the United States. With total fiscal year 2024 sales of more than $83 billion, Lowe's operates over 1,700 home improvement stores and employs approximately 300,000 associates. Based in Mooresville, N.C., Lowe's supports the communities it serves through programs focused on creating safe, affordable housing, improving community spaces, helping to develop the next generation of skilled trade experts and providing disaster relief to communities in need. For more information, visit Lowes.com.

About FBM
Founded in 2011 and headquartered in Santa Ana, California, FBM is an industry-leading building materials and construction products distribution company. With over 370 locations across the U.S. and Canada, FBM has an expansive North American reach with a mission to serve the changing needs of the professional construction trades. For more information, visit www.fbmsales.com.

Notes
¹ Based on percentage of Lowe's Pro sales compared to Lowe's total sales.
² Pro forma 2024 revenue of $6.5 billion and adjusted EBITDA of $635 million are unaudited for year ended December 31, 2024 and include full-year impact of REW Materials and Unified Door & Hardware Group acquisitions.
³ Multiple calculated based on purchase price, net of expected tax benefits of ~$300 million.

Disclosure Regarding Forward-Looking Statements
This press release includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Statements including words such as "believe", "expect", "anticipate", "plan", "desire", "project", "estimate", "intend", "will", "should", "could", "would", "may", "strategy", "potential", "opportunity", "outlook", "scenario", "guidance", and similar expressions are forward-looking statements. Forward-looking statements involve, among other things, expectations, projections and assumptions about future financial and operating results, objectives (including objectives related to environmental and social matters), business outlook, priorities, sales growth, shareholder value, capital expenditures, cash flows, the housing market, the home improvement industry, demand for products and services including customer acceptance of new offerings and initiatives, macroeconomic conditions and consumer spending, share repurchases and Lowe's strategic initiatives, including those relating to acquisitions and dispositions and the impact of such transactions on our strategic and operational plans and financial results. Such statements involve risks and uncertainties, and we can give no assurance that they will prove to be correct. Actual results may differ materially from those expressed or implied in such statements.

A wide variety of potential risks, uncertainties, and other factors could materially affect our ability to achieve the results either expressed or implied by these forward-looking statements including, but not limited to, the occurrence of any event or other circumstance that could give rise to the right of one or both of the parties to terminate the stock purchase agreement between Lowe's and FBM, the failure to obtain the regulatory approval or to satisfy the other conditions to the proposed transaction in the expected timeframe or at all, the risk of litigation and/or regulatory actions related to the proposed transaction, the potential adverse effects to the businesses of Lowe's or FBM during the pendency of the transaction, the possibility that the anticipated benefits and synergies of the transaction are not realized when expected, or at all, including as a result of the impact of, or problems arising from, the integration of the two companies or as a result of changes in general economic conditions, such as volatility and/or lack of liquidity from time to time in U.S. and world financial markets and the consequent reduced availability and/or higher cost of borrowing to Lowe's and its customers, slower rates of growth in real disposable personal income that could affect the rate of growth in consumer spending, inflation and its impacts on discretionary spending and on our costs, shortages and other disruptions in the labor supply, interest rate and currency fluctuations, home price appreciation or decreasing housing turnover, age of housing stock, the availability of consumer credit and of mortgage financing, trade policy changes or additional tariffs, outbreaks of pandemics, fluctuations in fuel and energy costs, inflation or deflation of commodity prices, natural disasters, geopolitical or armed conflicts, acts of both domestic and international terrorism, and other factors that can negatively affect our customers.

Investors and others should carefully consider the foregoing factors and other uncertainties, risks and potential events including, but not limited to, those described in "Item 1A - Risk Factors" in our most recent Annual Report on Form 10-K and as may be updated from time to time in Item 1A in our quarterly reports on Form 10-Q or other subsequent filings with the SEC. All such forward-looking statements speak only as of the date they are made, and we do not undertake any obligation to update these statements other than as required by law.

Use of Non-GAAP information
We refer to certain non-GAAP financial measures in this press release, including pro forma Foundation Building Materials Adjusted earnings before interest, taxes, depreciation, and amortization, or "PF FBM adjusted EBITDA".

PF FBM adjusted EBITDA, a metric prepared by Foundation Building Materials, is calculated as operating income, presented on a pro forma basis to include the full year impact of Foundation Building Materials' recent acquisitions of REW Materials and Unified Door & Hardware Group, and adjusted for certain items made by Foundation Building Materials in its discretion. These adjustments differ from the adjustments that Lowe's makes in calculating its non-GAAP financial measures.

PF FBM adjusted EBITDA has not been calculated in accordance with the rules governing pro forma calculations as set forth by the Securities and Exchange Commission and has not been audited. Quantitative reconciliations of Foundation Building Materials adjusted EBITDA cannot be provided as this metric has been calculated by Foundation Building Materials.

These non-GAAP financial measures should not be considered alternatives to, or more meaningful indicators of, Lowe's or Foundation Building Materials' financial measures as prepared in accordance with GAAP. Lowe's or Foundation Building Materials' methods of determining these non-GAAP financial measures may differ from the methods used by other companies and may not be comparable.

Material limitations associated with the use of such measures include that they do not reflect all period costs included in operating expenses and may not be comparable with similarly named financial measures of other companies. Furthermore, the calculations of these non-GAAP financial measures are based on subjective determinations of Foundation Building Materials regarding the nature and classification of events and circumstances that the investor may find material and view differently.

LOW-IR

Contacts:	Shareholder/Analyst Inquiries:		Media Inquiries:
	Kate Pearlman		Steve Salazar
	704-775-3856		steve.j.salazar@lowes.com
	kate.pearlman@lowes.com

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SOURCE Lowe's Companies, Inc.

FAQ

What is the value of Lowe's acquisition of Foundation Building Materials?

Lowe's is acquiring Foundation Building Materials (FBM) for $8.8 billion in cash, representing a 13.4x adjusted EBITDA multiple.

How will Lowe's finance the FBM acquisition?

Lowe's will finance the acquisition through a combination of short-term and long-term debt, supported by a $9.0 billion bridge financing from Bank of America and Goldman Sachs.

What are FBM's key financial metrics before the Lowe's acquisition?

In 2024, FBM generated $6.5 billion in revenue and $635 million in adjusted EBITDA, with 25% revenue CAGR and 30% EBITDA CAGR from 2019-2024.

When will the Lowe's-FBM acquisition close?

The acquisition is expected to close in the fourth quarter of 2025, subject to customary closing conditions and regulatory approval.

How many locations does FBM operate and what is its customer base?

FBM operates over 370 locations across the United States and Canada, serving 40,000 Pro customers in both new construction and repair/remodel applications.

What is the strategic rationale for Lowe's acquisition of FBM?

The acquisition advances Lowe's Total Home strategy by enhancing its Pro customer offerings, providing access to a $250 billion total addressable market, and creating significant cross-selling opportunities.