Insight into Why the Big are Intent on Getting Bigger in Today’s Market
Originally Published by: HBS Dealer — June 17, 2026
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It’s the “initials era” of the building materials industry.
The three-letter brands of QXO, SRS, GMS ADG, FBM, along with ticker symbols LOW and HD, appear in all CAPS with increasing frequency in business news headlines.
The impact on the industry is continuing to develop.
Home Depot and Lowe’s earnings reports were filled with comments on how the two giants will integrate their respective multi-billion acquisitions. And newcomer QXO has been busy explaining to the industry and investors how it intends to grow into a $50 billion company.
A common refrain among the consolidating entities is ambition for broader product portfolios, deeper relationships with pros and larger slices of market share across the lumber and building material ecosystem.
At Home Depot, the acquisition of SRS (and SRS’s subsequent acquisition of GMS) creates a single entity that now operates a fleet of about 16,000 delivery assets and a professional sales force of more than 5,000 people.
Home Depot added HVAC distribution to its total addressable market through the acquisition of Mingledorff’s, a southeastern wholesale distributor of HVAC equipment. The move boosts Depot’s TAM by $100 billion to $1.2 trillion, the company said.
“What we are building is unique and not easy to replicate,” said Home Depot CEO Ted Decker.
Eventually, the new acquisitions will connect through CRM systems. For now, synergies are happening manually, Decker said. “It’s introductions to customers, to our sales forces,” Decker said. “It's SRS to Home Depot, it's Home Depot to SRS, it's SRS and GMS. GMS had more exposure to the larger new builder, and they are introducing each of SRS and Home Depot to that builder.”
Lowe’s CEO Marvin Ellison said near-term integration of FBM (Foundation Building Materials) and ADG (Artisan Design Group) is on track.
New business for Lowe’s generated by FBM includes data center, stadium and municipality contracts. And the Mooresvile, N.C.-based giant expressed confidence that FBM and ADG will allow Lowe’s to capitalize on the future recovery of the residential homebuilding business.
“We estimate that there's going to be roughly 12 million new homes needed by the year 2033,” Ellison said during the company’s latest earnings call with investors. “Historically, Lowe's has generated zero revenue in the new home and multifamily construction projects, and we estimate that's roughly a $250 billion total addressable market.”
Against this tide of mega acquisitions and billion-dollar synergies, voices representing the independent LBM business have shared with HBSDealer their own confidence in their ability to protect their market share and grow their sales.
“At the end of the day, I think consolidation has been good for independent LBM dealers,” said Dan Robuck III. Local market knowledge combined with a customer focus is difficult for consolidating giants to match, he explained.
That idea echoes around the industry. (See Distribution Discussion: An independent Q&A.)
Russ Kathrein, VP of LBM for Do it Best Group put it this way: “Reports of the death of the independent lumberyard are greatly exaggerated. An adequately capitalized independent dealer can move quicker and more nimbly than the large national players.”
The LBM attraction
During a recent “fireside chat” at the Economics Club of New York, QXO founder and CEO Brand Jacobs described why the building products distribution space is attractive to investors:
“I think it's a safe bet that building products are not going into the metaverse. I think that that 5 years or 10 years from now, you're still gonna go home to a real physical house with a roof and windows and doors and bathtub.
“And over time, because of the shortage of housing and the age of all the commercial and residential houses and buildings, I think there's gonna be a lot of repair and remodeling.”