- Home Depot and Lowe’s are shifting from soft DIY demand toward Pro-focused B2B growth via major building-materials acquisitions in 2025.
- Home Depot is buying GMS for about $5.5B including debt, integrating it with SRS to expand assortments and jobsite delivery scale.
- Lowe’s is acquiring Foundation Building Materials for about $8.8B, adding roughly 370 sites serving about 40,000 Pro customers.
- Competitive bidding, premium valuations, and HSR antitrust review underscore both the strategic urgency and the integration/macro-cycle risks.
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The convergence of Home Depot and Lowe’s in seeking dominance in the professional contractor (“Pro”) segment reflects a longer-term strategic recalibration. With consumer DIY spending weakening under high interest rates and housing affordability constraints, firms are doubling down on B2B businesses with more consistent demand. Home Depot’s acquisition of GMS, integrating with its SRS platform, diversifies its product offering into wallboard, ceilings, steel framing—adjacent verticals that complement its SRS footprint in roofing, landscaping and exterior work. Lowe’s FBM acquisition similarly expands into interior build materials, moving past consumer retail and into full trade supply.
Financially, both transactions represent significant capital deployment: Home Depot paid ~$110 per GMS share, for an equity value of ~$4.3B and enterprise value ~$5.5B; Lowe’s FBM deal likewise at ~$8.8B signals that the pro-builder market carries premium valuations and that scale and fulfillment efficiency are key differentiators. Both companies emphasize faster fulfillment, broader assortments, and digital & credit platforms, aiming to capture share in the highly fragmented Pro space.
Operationally, these deals enhance network density and logistical capability. Post-Home Depot SRS+GMS transaction, the combined network will be over 1,200 locations with more than 8,000 trucks capable of robust jobsite delivery operations. Lowe’s gains FBM’s management continuity and regional strength, especially in geographies like California, the Northeast, the Midwest, which are harder to build organically.
Risks remain: regulatory approvals under antitrust (HSR), integration risk (systems, cultures, legacy debt), exposure to pro sector demand (sensitive to construction starts, macro / interest rates), and the risk of overpaying amidst competitive auctions. The Home Depot’s withdrawal and re-filing of HSR notification for GMS and the early termination of its waiting period illustrate both regulatory complexity and urgency.
Open questions going forward include: How will these acquisitions impact margins (gross & operating) for Home Depot and Lowe’s? What share of Pro customer spend can be reclaimed from specialized distributors? What pricing power and cross-selling synergies will emerge, especially for digital trade channels? Will these enhanced networks enable pricing and service models that differentiate against both local suppliers and e-commerce players?
Supporting Notes
- Home Depot agreed to acquire GMS Inc. for $110 per share in a cash tender offer, reflecting an equity value of ~$4.3B and enterprise value (including net debt) of ~$5.5B.
- The GMS deal includes more than 300 distribution centers and nearly 100 tool sales, rental and service centers; the combined SRS-GMS network will have over 1,200 locations with more than 8,000 trucks.
- Lowe’s acquisition of FBM is worth ~$8.8B; FBM has over 370 locations in the U.S. and Canada and serves approximately 40,000 Pro customers.
- Home Depot acquired SRS Distribution in 2024 for ~$18.25B, using it as a platform to integrate GMS.
- The Home Depot deal includes regulatory review under the Hart-Scott-Rodino Act, with extension of tender offer deadlines reflecting antitrust clearance delays.
- Home Depot outbid QXO’s earlier proposal (about $5B cash) for GMS, demonstrating competitive dynamics in the acquisition environment.
- Both companies emphasize fulfillment, trade credit systems, digital tools, and broader product assortments aimed at large contractors and commercial builds.