Foundation Building Materials to Be Privately Acquired

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SANTA ANA, CA — Foundation Building Materials, Inc., one of the largest specialty building products distributors of wallboard, suspended ceiling systems, metal framing and complementary and other products in North America, announced Nov. 15 that it has entered into a definitive agreement under which an affiliate of American Securities LLC, a private equity firm, will acquire all outstanding 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.

DeliveryThe 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, 2020, 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. Having founded FBM nearly a decade ago, I am confident American Securities is the right partner for our company’s next phase, as we work to advance our strategic priorities and continue building long-term value for the Company. This transaction is truly a testament to the hard work and dedication of our more than 3,400 employees, and I’m excited to partner with the team at American Securities to further accelerate our success.”

“The FBM Board, led by the Special Committee and with the assistance of independent financial and legal advisors, conducted a thorough review of opportunities to enhance shareholder value, and unanimously concluded that entering into this agreement with American Securities represents the best way to maximize value,” said Chris Meyer, Chairman of the FBM Board. “This transaction with American Securities is a great outcome for FBM, and I thank Ruben and the rest of the management team for leading FBM to this critical point in the Company’s history. We look forward to FBM’s continued success with its new partner.”

“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,” said Kevin Penn, a Managing Director of American Securities. “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 relationships with its customers and partners.”

Approvals

Following execution of the merger agreement, FBM’s majority shareholder, which owns approximately 52% of the Company’s outstanding shares of common stock, approved the transaction by written consent. No further action by FBM’s shareholders is needed or will be solicited in connection with the merger.

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 (Canada).

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