LOWE’S has confirmed its $8.8 billion plan to buy a chain that has 370 locations across the US.
Chiefs believe that the massive purchase will serve a specific market, at a time when competition is reaching a fever pitch.
Lowe’s has just announced a massive purchase to keep pace with rivals The Home Depot[/caption]
Lowe’s has announced its plan to purchase Foundation Building Materials (FBM).
This is a building material distributor based in California, with locations nationwide.
FBM distributes interior balding products, including ceiling systems, drywall and insulation.
This deal will mean that Lowe’s customers have access to FBM’s distribution networks.
The Lowe’s purchase is expected to be completed in the fourth quarter of the year.
Lowe’s CEO Marvin Ellison said in a statement: “With this acquisition, we are advancing our multi-year transformation of the Pro offering.
“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.”
Lowe’s Chairman Marvin Ellison added that hes sees the purchase as a way to support the professional builders’ market.
These are people who typically make large, unplanned purchases for a job.
As a company, FBM has experienced a period of growth under the ownership of American Securities and CD&R.
The new leadership has resulted in 27% growth in yearly revenue.
Ruben Mendoza, CEO of FBM commented in a separate statement: “Working alongside American Securities and CD&R has been incredible.
“With their support, we’ve been able to accelerate growth, expand our capabilities, and improve our position, all while staying true to our values and culture.
MYLOWE’S REWARDS TIERS EXPLAINED
Here are the tiers included in the Lowe’s rewards program:
- Bronze Key: Earns 1 point per dollar spent and offers free standard shipping on eligible purchases of $35 or more.
- Silver Key: Earns 1.25 points per dollar and includes free standard shipping on eligible items with no minimum purchase required.
- Gold Key: Earns 1.5 points per dollar and provides free standard shipping on eligible items with no purchase minimum.
“I am immensely grateful for what our team has accomplished and am excited about the opportunities ahead as we join forces with Lowe’s.”
STRONG COMPETITION
The Lowe’s purchase comes at a volatile time for the industry, and strong competition from its biggest rival, The Home Depot.
Last year, The Home Depot purchased the building materials supplier SRS Distribution for $18.25 billion.
SRS serves professional contractors in roofing, landscaping and pool work.
It is based in Texas, and has a sales force of over 2,500 people, and 760 branches in the US across 47 states.
At the time, the company said this would boost its business with professional customers, much like with Lowe’s.
The Home Depot CEO Ted Decker said in a statement on the purchase: “SRS is an industry leader with a proven track record of profitable growth across verticals.
“SRS’s ability to build leadership positions in each of its trade verticals while generating significant revenue growth is a testament to its strong vision, leadership, culture and execution.”
Lowe’s has announced its plan to purchase Foundation Building Materials (FBM)[/caption]
