Another major acquisition agreement has surfaced involving a private investment firm and a major building product distributor.
Foundation Building Materials, Inc. has entered into a definitive agreement under which an affiliate of American Securities LLC will acquire all outstanding shares of the company.
Terms of the deal call for investment firm American Securities to acquire shares of FBM for $19.25 per share in an all-cash transaction valued at approximately $1.37 billion, including outstanding debt.
An affiliate of Lone Star Funds, a global private equity firm, acquired FBM in 2015 and has maintained a majority ownership since the company’s initial public offering in 2017.
Upon completion of the transaction, FBM will become a privately held company.
Based in Santa Ana, Calif., FBM employs more than 3,400 employees and operates more than 170 branches across the United States and Canada. The company distributes wallboard, suspended ceiling systems, metal framing, and complementary products throughout North America.
Earlier this month, FBM reported that third quarter sales fell 7.7% to $521.3 million from third quarter 2019 sales of $565 million. Sales for the full fiscal year 2019 increased 5.4% to $2.15 billion from 2018 sales of $2.04 billion.
The transaction was unanimously approved by the FBM Board of Directors and represents a premium of approximately 27% to the closing price of $14.91 of FBM common stock on Nov. 13. This is the last trading day prior to the transaction announcement.
"We are pleased to announce this transaction with American Securities, delivering immediate cash value to our shareholders at a significant premium," said Ruben Mendoza, president and CEO of FBM. “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.”
Mendoza founded FBM nearly a decade ago and said that he is confident that American Securities is the right partner of the next phase of the company.