Lowe’s completes acquisition of Foundation Building Materials

MOORESVILLE, N.C. - Lowe’s Companies, Inc. (NYSE:LOW), a prominent player in the Specialty Retail industry with a market capitalization of $133 billion, announced Thursday it has completed its acquisition of Foundation Building Materials (FBM), a building materials distribution company with over 370 locations across the United States and Canada. According to InvestingPro data, Lowe’s currently trades near its Fair Value, suggesting the timing of this strategic acquisition aligns with the company’s stable market position.

The acquisition is expected to enhance Lowe’s offerings to professional customers through expanded product assortment, faster fulfillment, improved digital tools, and a trade credit platform. The move provides Lowe’s with growth opportunities to expand its professional customer footprint, particularly in California, the Northeast and the Midwest. With annual revenue of $83.6 billion and a strong financial health score rated as GOOD by InvestingPro, the company appears well-positioned to execute this expansion strategy.

FBM will continue to be led by its founder, Ruben Mendoza, and its senior leadership team, according to the company’s statement.

"Completing the acquisition of FBM is an important step in accelerating our Total Home strategy to serve large Pro customers within a $250 billion total addressable market," said Marvin R. Ellison, Lowe’s chairman, president, and CEO.

The FBM acquisition follows Lowe’s recent purchase of Artisan Design Group (ADG). Together, these acquisitions are part of Lowe’s strategy to create a comprehensive interior solutions platform for homebuilders and to position the company to capitalize on housing market opportunities.

Goldman Sachs & Co. LLC and Centerview Partners LLC acted as financial advisors to Lowe’s, with Freshfields LLP serving as legal advisor. RBC Capital Markets acted as financial advisor to FBM, with Weil, Gotshal & Manges LLP as legal advisor.

Based in Mooresville, North Carolina, Lowe’s operates over 1,700 home improvement stores across the United States and reported fiscal year 2024 sales exceeding $83 billion, according to the press release statement. The company has maintained dividend payments for 55 consecutive years, with a current dividend yield of 2.02%. InvestingPro subscribers can access 10+ additional exclusive insights about Lowe’s financial health and growth prospects through the comprehensive Pro Research Report.

In other recent news, Lowe’s Companies Inc. has entered into new credit agreements to support its $8.8 billion acquisition of ASP Flag Parent Holdings, Inc. The company secured a $2 billion unsecured revolving credit facility and a $2 billion unsecured term loan facility, both led by Bank of America, N.A. These facilities aim to fund part of the acquisition cost and support Lowe’s existing commercial paper program. Additionally, Lowe’s second-quarter results have prompted multiple analyst firms to adjust their price targets. Piper Sandler increased its price target to $294, maintaining an Overweight rating, citing comparable sales strength and a positive outlook for the second half of the year. KeyBanc also raised its price target to $300, highlighting Lowe’s 1.1% comparable sales growth, the strongest in over two years. Meanwhile, Stifel adjusted its price target to $275 while maintaining a Hold rating, noting stronger quarterly results and favorable trends. Despite these developments, Stifel reiterated its Hold rating with a $275 price target, indicating no material changes to its estimates after Lowe’s 10Q report.

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