An affiliate of private equity firm American Securities LLC has acquired all outstanding shares of Foundation Building Materials (FBM) for $19.25 per share. The all-cash transaction of the specialty building products distributor is valued at approximately $1.37 billion, including outstanding debt, according to a news release.
“We are pleased to announce this transaction with American Securities, delivering immediate cash value to our shareholders at a significant premium,” Ruben Mendoza, president and CEO of FBM, said in a prepared statement. “American Securities has a proven track record of investing in building products and distribution businesses, and shares our commitment to providing superior products and services to our customers.”
Upon completion of the transaction, FBM will become a privately held company. FBM was previously acquired by an affiliate of global private equity firm Lone Star Funds in 2015. The affiliate had maintained a majority ownership of FBM since the distributor’s initial public offering in 2017.
The transaction, which was unanimously approved by the FBM board of directors, represents a premium of approximately 27% to the closing price of FBM common stock on November 13, the last trading day prior to the transaction announcement.
“FBM’s strong national brand and reputation as the distributor of choice for leading building product suppliers make it a compelling investment for American Securities,” Kevin Penn, a managing director of American Securities, said. “FBM has built meaningful relationships with its loyal customer base, and its focus on customer service underpins its leading market position. We look forward to working with the FBM team to build on the company’s leadership and grow its global presence while further strengthening its relationship with its customers and partners.”
FBM said the transaction is expected to close in the first quarter of 2021, subject to customary closing conditions, including receipt of clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the Competition Act.
Santa Anna, Calif.-based FBM is a specialty distributor of wallboard, suspended ceiling systems, metal framing, and complementary products throughout North America. The company operates over 170 branches across the United States and Canada. FBM ranked 9th on the 2020 ProSales 100 list and recently reported third quarter sales fell 7.7% from the third quarter of 2019 to $521.3 million.
The acquisition is the second in less than a week involving a major building materials distributor. US LBM, another company in the top 10 on the ProSales 100 list, recently reported it signed a definitive agreement for Bain Capital Private Equity to acquire a major stake in the dealer.
