Ruben Mendoza’s rise from teen entrepreneur in the San Gabriel Valley to building a national distribution company in Orange County—and potentially joining Lowe’s on an $8.8 billion deal—can be attributed to a simple philosophy.
“You have to have the balls to take some risks,” Mendoza, CEO of Foundation Building Materials (FBM), told the Business Journal.
The devout Christian said faith also helps.
“We started this business from scratch. It’s the hardest thing I’ve ever done. I was on my knees every day, just praying to make it,” he said in an interview two weeks after selling his 14-year-old Santa Ana construction distribution business to retail giant Lowe’s for $8.8 billion.
Mendoza’s take-risk mindset has led him to accomplish quite a bit over the past 40 years—from starting his own office and carpet cleaning company as a teen to working as an advertising salesperson.
But his biggest meal ticket came in the form of Foundation Building Materials (FBM), a distributor of building materials for commercial and residential construction projects with more than 370 locations in the U.S. and Canada.
He and his two partners launched FBM in 2011 with $4 million in funding. The company has since expanded into 48 states and generated an estimated $6.5 billion of revenue in 2024.
Mendoza and his FBM team started as a private company, went public, became private again and bought 68 companies along the way.
The Santa Ana company caught the eye of Lowe’s, a Fortune 100 home improvement retailer that entered into an agreement in August to buy FBM for $8.8 billion.
The acquisition of FBM, expected to close later this year, will boost Lowe’s large Pro business—a $250 billion space.
“The attraction is the ‘Pro,’” Mendoza said. “The Pro is where they’re going to grow.”
The Distribution Advantage
FBM has 3,000 trucks on the road every day, delivering products to homes, high rises and multifamily properties. Mendoza said Lowe’s, in comparison, might have one flatbed truck for every two stores.
“They don’t do that many deliveries. They do a lot of inbound and a lot of distribution center deliveries to their stores, but not a lot of delivery to the customer,” Mendoza said of Lowe’s. “We do a lot of it, every day.
“If a do-it-yourselfer or a small pro went into Lowe’s and said, ‘I need a truckload of drywall,’ it’s hard for that store manager to get that for him,” Mendoza continued. “Well now, they can get that to him 50 times a day. That’ll be easy for them.”
Mendoza said the Lowe’s deal would also help FBM fill its gaps with products the Santa Ana distributor doesn’t carry, such as Craftsman and Kobalt.
“Together, we’ll sell more tools. They’ll help us digitally with our online presence. They’ll help us marketing-wise. We have four or five people in our marketing department; they have hundreds,” Mendoza said. “It’s a really good match.”
FBM’s profit margin is about 10% these days, higher than a typical distribution company, which Mendoza attributes to the company’s culture.
“We manage our business right. We have pricing departments. We have procurement departments. We do a lot of things with sales,” Mendoza said. “We’ve been in the building products business our whole lives. Our friends are our customers. Our friends are our vendors, and we know this business.”
The Art of the Deal
Lowe’s, which reported more than $83 billion in sales for its 2024 fiscal year, demonstrated its commitment to the home improvement industry despite an overall slowing in the market.
Mendoza said the home center market experienced limited growth in recent years, thanks to Amazon and others.
Lowe’s and its top rival The Home Depot are competing to acquire as many companies as possible.
Atlanta-based Home Depot, for example, bought SRS Distribution Inc. for more than $18 billion last year. The Home Depot recently closed a deal to buy GMS Inc., a direct competitor to FBM, for $5.5 billion.
After buying Dallas-based Artisan Design Group for $1.3 billion earlier this year, Lowe’s looked for more acquisition opportunities and set its sights on FBM. A pair of Lowe’s representatives reached out to Mendoza and soon set up a dinner to discuss a possible deal.
Lowe’s CEO Marvin Ellison met Mendoza and once they came to an agreement, the deal was quickly consummated about 30 days later.
During a conference call with analysts, Ellison was effusive in his praise of FBM, particularly its roll-up strategy that made more than 60 acquisitions.
“The result is a purpose-built highly scalable, multitrade distribution platform,” Ellison told analysts. “Today, FBM is a leader in drywall, ceiling systems and metal framing with an established presence loyal customer base, and a highly effective sales force that optimizes advanced selling tools to drive engagement and conversion.”
FBM will maintain its central operations in Santa Ana.
Mendoza will remain onboard as an executive, reporting directly to Ellison. He will remain with the company for a minimum of three years.
“We don’t plan to consolidate any of our locations with a Lowe’s,” Mendoza said.
Humble Beginnings
Mendoza was born in Southern California. Both he and his wife, Heidi, whom he met in the eighth grade, were raised in the Diamond Bar-Walnut area. They’ve been married 35 years.
Mendoza’s 95-year-old mother still lives in the Walnut house that his parents bought when he was two.
He now lives in Newport Beach, with a daughter in Manhattan and his elder son in Orange County. Mendoza’s second son is planning to relocate to Orange County later this year.
In his teen years, Mendoza recalls picking up work as a cleaner.
“My first jobs were cleaning carpets and offices,” Mendoza said, initially working for someone, then later starting his own office cleaning company.
The business, where his wife chipped in and helped, supported his college studies.
Mendoza went into advertising after college and then worked for a printing company.
Mendoza shifted to the distribution industry after he married, working for his father-in-law’s company as a salesperson specializing in drywall and metal framing.
His father-in-law ran a company with $40 million in sales when Mendoza joined the firm in 1991. The company grew to $275 million when Mendoza’s father-in-law sold it in 2003.
The FBM founder then spent a few years heading up another company before deciding to start his own distribution firm with two other partners. Mendoza put up 70% of the money with some of the funding coming from him selling a vacation home. A second partner contributed 25%, while the third partner rounded out the investment with a 5% share. FBM, with $4 million in seed money, launched on March 1, 2011.
The first 18 months of FBM were the toughest, according to Mendoza.
“We bought some trucks from a guy that was going out of business. We leased a place,” Mendoza said, adding he and his CFO signed a personal guarantee for his company’s initial location in Orange and the loan funding FBM’s operation.
“Our whole butts were on the line for everything,” Mendoza said.
He said the biggest struggle was transitioning from a company with large operations to a small business.
“There’s a lot of rejection in there. Our trucks were sitting around. Our guys were sitting around,” Mendoza recalled.
He added one of his employees didn’t have much confidence in the future of FBM.
“For the first couple years, this gentleman, all he would say was, ‘I don’t think we’re going to make it.’ Every time I’d walk the warehouse, he goes, ‘We’re not busy enough,’” Mendoza said. “I’d just go inside and freak out.”
Mendoza, however, persisted, opting to fast-track growth with acquisitions.
He bought a company in Northern California and another one in San Diego.
That kick-started growth, and customers started to show up.
A few other deals occurred along the way, and after four years, FBM was almost a $1 billion company.
Every company and private equity firm that has worked with FBM has performed well and beyond expectations, according to Mendoza.
He added a fair number of people within FBM—as many as 300—will walk away from the deal with Lowe’s with the ability to pay off home mortgages or fund college for their grandchildren.
Mendoza says he has spent most of his life brainstorming about his next moves.
“All I ever do, all day, is think of stuff. Some of it works, but obviously some of it doesn’t,” Mendoza said.
“I learned a long time ago, some stuff, you’re going to make decisions on, it’s going work, and plenty of it is going to fail,” Mendoza continued. “But you have to make decisions and go for it.”
Christianity Shapes Mendoza’s Career
Ruben Mendoza dedicated himself to the Christian faith in 1995.
Since then, his faith has played a major role in his personal and professional lives, with Mendoza telling his children he’d eventually start a company with the word “foundation” in the title as an ode to Christianity.
While also running Foundation Building Materials, he’s also involved in several charities.
He works with KidWorks, which offers various school programs to K-12 students, and the Orange County Rescue Mission, a faith-based program in Tustin that aims to reduce homelessness. Mendoza and his wife also visited El Salvador recently for a mission where they spent a week delivering wheelchairs for those in need.
“I have a fair amount of community involvement,” Mendoza said. “There’s a scripture: to much is given, much is required.”
Mendoza said family-oriented culture and a faith-based approach helped him build a company with values and ultimately allowed him to sell FBM for a higher valuation than his direct competitor GMS Inc., which The Home Depot acquired for $5.5 billion.
“Our culture and the faith that I’ve had has helped us become who we are today,” he said. “I’m a regular Joe who’s worked pretty hard, but God’s been good to me.”
Patching with the Angels
If baseball fans wonder why Foundation Building Materials sounds vaguely familiar, it could be because the company is a sponsor of the Los Angeles Angels, where every player’s uniform has a patch with FBM’s logo.
“Foundation Building Materials is in every Major League Baseball city,” Ruben Mendoza told the Business Journal. “It made a lot of sense to do that. Wherever the Angels play, our guys have a suite, they bring customers, that’s all included in our sponsorship. Everywhere they go, we are there.”
The Angels selected FBM as the jersey patch sponsor in 2023 after hiring Excel Sports Management to find companies interested in placing their logo on the team’s uniforms.
More than 100 companies bid for the sponsorship opportunity, with the Angels narrowing the field to 20 candidates after a two-month process.
The Angels selected FBM, in part, because it is based in Orange County. The sponsorship has been successful enough that the contract has been extended for a fourth year.
“The fact we ended up with a local company is a very positive thing,” Angels Executive Vice President Dana Wells said in a statement in 2023. “We just feel like there is a lot of synergy with Ruben and his vision on his business. It’s a lot of the same core values we have. We’d love to build it into a bigger long-term opportunity.”
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