Lowe’s to acquire Foundation Building Materials for $8.8 billion

MOORESVILLE, N.C. - Lowe’s Companies, Inc. (NYSE:LOW), a prominent player in the Specialty Retail industry with a market capitalization of $143.5 billion, announced Wednesday it has entered into a definitive agreement to acquire Foundation Building Materials (FBM) for approximately $8.8 billion in cash, representing a 13.4x adjusted EBITDA multiple. According to InvestingPro data, Lowe’s maintains a strong financial health score, positioning it well for this strategic acquisition.

FBM is a North American distributor of interior building products including drywall, metal framing, ceiling systems, and insulation. The company operates over 370 locations across the United States and Canada, serving 40,000 professional customers. In 2024, FBM generated approximately $6.5 billion in revenue and $635 million in adjusted EBITDA on a pro forma basis.

The acquisition is expected to enhance Lowe’s offerings for professional customers through expanded capabilities, faster fulfillment, improved digital tools, and a trade credit platform. This move aligns with Lowe’s Total Home strategy and follows its recent acquisition of Artisan Design Group.

"With this acquisition, we are advancing our multi-year transformation of the Pro offering," said Marvin R. Ellison, Lowe’s chairman, president, and CEO.

Ruben Mendoza, FBM’s president and CEO, will continue to lead FBM along with the current senior leadership team following the acquisition.

Lowe’s has secured $9 billion in bridge financing from Bank of America and Goldman Sachs to fund the transaction. The company plans to finance the acquisition through a combination of short-term and long-term debt while maintaining its current credit ratings. InvestingPro analysis shows Lowe’s operates with a moderate level of debt and has maintained dividend payments for 55 consecutive years, demonstrating its financial stability. For deeper insights into Lowe’s financial position and future prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.

The transaction is expected to close in the fourth quarter of 2025, subject to regulatory approval and other customary closing conditions. Lowe’s anticipates the acquisition will be accretive to adjusted diluted earnings per share in the first full year after closing, excluding synergies. Based on current InvestingPro Fair Value calculations, Lowe’s stock appears to be trading near its Fair Value, with the company generating robust annual revenue of $83.2 billion and maintaining healthy profit margins.

The announcement was made alongside Lowe’s second quarter 2025 earnings release.

In other recent news, Lowe’s Companies, Inc. has finalized its acquisition of Artisan Design Group, a provider of design and installation services for interior finishes. This strategic move aims to enhance Lowe’s professional services and expand its distribution channels within a market valued at approximately $50 billion. Additionally, Lowe’s has increased its quarterly cash dividend by 4% to $1.20 per share, reflecting confidence in its long-term growth strategy and commitment to shareholder value. The dividend is payable on August 6, 2025, to shareholders of record as of July 23, 2025.

Mizuho has reiterated its Outperform rating on Lowe’s stock, maintaining a $280.00 price target despite challenges such as sector pressures and tariff-related concerns. Meanwhile, Evercore ISI has maintained an In Line rating with a $245.00 price target, noting potential risks ahead of the company’s second-quarter earnings report. During its recent annual meeting, Lowe’s shareholders voted on key proposals, including the election of directors, with all nominees securing their positions. These developments indicate Lowe’s ongoing strategic initiatives and its efforts to navigate a complex consumer environment.

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