Clayton, Dubilier & Rice, a private investment firm with offices in New York and London, and American Securities LLC announced last week that CD&R has taken an ownership position in Foundation Building Materials, Inc. from affiliates of American Securities.
The news, announced in a Jan. 31 news release, will provide an equity boost to FBM, a distributor of specialty building products, which operates in more than 300 locations and serves more than 40,000 residential, non-residential and specialty contractors and homebuilders throughout North America. American Securities will continue to own a majority stake in FBM.
Founded in 2011, FBM products include gypsum wallboard, suspended ceiling systems, metal framing, and other construction materials. In 2021, FBM was acquired by American Securities and has grown organically and through strategic acquisitions, CD&R said, including its combination with Beacon’s interior products and insulation businesses. These initiatives have expanded its product and service offering to customers and grown its employee base and footprint in key regions throughout North America.
“FBM is a well-run, market-leading business that adds significant value for its customers and is well-positioned for growth,” said Tyler Young, principal at CD&R. “Working alongside the teams at FBM and American Securities, we will focus on helping the company achieve its full growth potential, broadening and enhancing its industry-leading services and product offerings, and deepening its relationships with customers, employees, vendors, and communities across North America.”
As part of the transaction, three CD&R professionals will join FBM’s Board of Directors. CD&R’s investment in FBM was completed on Jan. 30. Debevoise & Plimpton LLP served as legal counsel to CD&R, and Weil, Gotshal & Manges LLP served as legal counsel to American Securities on the transaction. RBC Capital Markets LLC served as FBM's financial advisor.
“We are pleased to welcome CD&R as an investment partner alongside American Securities; CD&R has a longstanding track record of investing in and growing market-leading building products distribution companies like ours with an approach to value creation that is very much aligned with FBM’s guiding values and operating principles.” said Ruben Mendoza, president and CEO of FBM.
“We have long admired FBM and have tremendous respect for the business Ruben and his team have built,” said Nate Sleeper, CEO of CD&R. “We look forward to supporting FBM through its next phase of growth and to partnering with American Securities.”
The distributor, based in Santa Ana, Calif., employs more than 5,600 employees and operates more than 300 branches across the United States and Canada.
“We are confident this partnership with CD&R represents a compelling next step in the ongoing evolution of FBM and accelerates the company’s growth course,” said Kevin Penn, a managing director of American Securities. “In recent years, the company has made significant progress towards achieving key strategic priorities, including investing in a new e-commerce platform …and is well-positioned to build on this momentum.”
For more information, visit cdr-inc.com.