Lowe’s $8.8 billion bet on pros reshapes the building supply market
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Lowe’s is making its largest move yet to capture professional builders and contractors, agreeing to acquire Foundation Building Materials for $8.8 billion. The all-cash deal, expected to close later in 2025, is designed to accelerate Lowe’s Total Home strategy while sharpening its competition with Home Depot. The transaction adds more than 370 distribution locations across the United States and Canada and provides access to about 40,000 professional customers.
Why Lowe’s is betting big on the professional builder market
For years, Lowe’s has leaned heavily on do-it-yourself homeowners, while Home Depot built a stronger foothold with professional builders. The professional market, valued at about $250 billion, is increasingly seen as the most reliable source of growth in home improvement retail. Unlike consumer spending, which can fluctuate with disposable income, contractor demand is tied to long-term projects and steady development pipelines.
By expanding into professional services, Lowe’s is aiming to balance its business mix and capture recurring revenue. The company’s leadership has emphasized that increasing pro penetration is critical to its performance. With this deal, Lowe’s is narrowing the competitive gap and signaling its intent to be a stronger player in the sector.
Inside the Foundation Building Materials business
Foundation Building Materials is one of North America’s largest distributors of interior construction products. Its catalog includes drywall, insulation, ceiling systems, doors, and framing supplies, materials that support both commercial and residential projects.
In 2024, the company generated roughly $6.5 billion in revenue and about $635 million in adjusted earnings before interest, taxes, depreciation, and amortization. Its scale, combined with a base of 40,000 contractor customers, made it an attractive target. By acquiring Foundation, Lowe’s gains access to long-standing contractor relationships and the ability to expand trade credit and fulfillment services.
Financial and strategic details of the deal
The $8.8 billion acquisition is being financed with a mix of short- and long-term debt, supported by $9 billion in bridge financing commitments from Bank of America and Goldman Sachs. The purchase price reflects about 13 times Foundation’s adjusted earnings, positioning it as a premium but strategic investment.
The company expects the acquisition to lift adjusted earnings in its first full year. The move follows Lowe’s $1.3 billion purchase of Artisan Design Group earlier in 2025, signaling a broader strategy focused on professional customers. Both deals reinforce the Total Home vision, which includes stronger pro-focused services, faster fulfillment, and expanded product offerings.
Market reaction and earnings context
The deal comes on the heels of strong quarterly results. In its second quarter of 2025, Lowe’s reported $23.96 billion in revenue, adjusted earnings per share of $4.33, and a 1.1 percent increase in comparable sales. These results topped expectations and allowed the company to raise its full-year sales forecast to a range of $84.5 billion to $85.5 billion, up from previous guidance.
Analysts view the Foundation acquisition as a decisive step in Lowe’s effort to rival Home Depot in the professional space. Home Depot has also been active, acquiring SRS Distribution for $18 billion and GMS for $4.3 billion. The wave of consolidation shows how important pro customers have become in shaping the future of the building supply industry.
Lowe’s faces the challenge of integrating Foundation’s large network and aligning it with existing operations. Success will determine whether the acquisition delivers the expected efficiencies. There are opportunities for cross-selling, expanding credit services, and using digital platforms to streamline orders and logistics.
If managed effectively, the deal could reshape Lowe’s role in the contractor segment. For professional customers, the expanded reach promises broader product availability and enhanced services. For the wider market, it underscores the growing battle between two home improvement giants competing for long-term dominance in the professional builder space.
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