Lowe’s has further staked its interest in the professional customer market with its $8.8 billion acquisition of Foundation Building Materials (FBM).
Santa Ana, California-based FBM is a building materials and construction products distribution company with over 370 locations across the United States and Canada. The company specializes in interior products, including drywall, metal framing, ceiling systems, commercial doors and hardware, insulation, and complementary products. FBM services customers in the new construction and repair and remodel industries.
The acquisition by Lowe’s is the latest in a flurry of multi-billion dollar deals in the building products space over the last 18 months, signaling the importance of professional customers to big box retailers.
Home Depot acquired SRS Distribution for $18.25 billion in March 2024, expanding its exposure to the roofing segment as well as landscape supply and pool suppl through SRS Distribution’s subsidiaries Heritage Landscape Supply Group and Heritage Pool Supply Group. Nearly a year later, technology-forward startup QXO acquired roofing products distributor Beacon Building Products for $11 billion. Recently, Home Depot outbid QXO to acquire specialty building products distributor Gypsum Management & Supply (GMS) in a deal valued at $5.5 billion.
“All signs point to further consolidation ahead. The recent wave of acquisitions by Lowe’s, Home Depot, and QXO are a push by the retailers into a different type of pro customer, who commands significant influence on products installed—and typically high-margin business,” says Todd Tomalak, principal, advisory of building products for Zonda. “The message should be clear to the rest of the industry: Two-step distribution is in the crosshairs of these large companies who previously focused on other segments of the market.”
In 2024, FBM generated approximately $6.5 billion in revenue and serviced more than 40,000 pro customers. Lowe’s says the acquisition of FBM will accelerate its Total Home strategy by enhancing its offering to pro customers through expanded capabilities, faster fulfillment, improved digital tools, a robust trade credit platform, and cross-selling opportunities between FBM, Lowe’s, and recently acquired Artisan Design Group (ADG). Lowe’s says combining these acquisitions with its existing offering will create a “premier platform” to better serve the large pro customer segment.
“With this acquisition, we are advancing our multi-year transformation of the pro offering,” Marvin Ellison, Lowe’s chairman, president, and CEO, said. “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.”
FBM president and CEO Ruben Mendoza as well as the FBM senior leadership team will continue to lead the organization and collaborate closely with Lowe’s.
