QXO to acquire Beacon Roofing Supply
QXO, Inc. (NYSE: QXO) and Beacon Roofing Supply, Inc. (Nasdaq: BECN) today announced that they have entered into a definitive merger agreement under which QXO will acquire Beacon for $124.35 per share in cash. Beacon is a leading distributor of roofing, waterproofing and exterior products, with nearly 600 branches across the U.S. and Canada.
QXO says more to come
QXO spokesman Joe Checkler said the Connecticut-based company intends to grow very big, very fast.
How big? $50 billion is the target.
“We expect Beacon to be the first of many acquisitions, putting us on track toward our intended goal of $50 billion in revenue," he said. "Beacon is a great company in a large and growing industry, and we’re confident that the same playbook we used in waste management, equipment rental and transportation is completely applicable to Beacon’s business."
He pointed to Brad Jacobs' experience with acquisitions in 2015 of Norbert Dentressangle and Con-way. Both, he said, were integrated simultaneously into a cohesive, global organization and doubled each of their profits between 2015 and 2018. "We see similar opportunities with Beacon," he said.
The boards of directors of both companies have unanimously approved the transaction, which values Beacon at approximately $11 billion, including all its outstanding debt. The transaction is expected to close by the end of April, subject to a majority of Beacon shares tendering in the offer and other customary closing conditions. Beacon’s board unanimously recommends that all shareholders tender their shares into the offer.
“Acquiring Beacon is a key milestone in our plan to create substantial shareholder value and establish QXO as a leader in the $800 billion building products distribution industry,” said Brad Jacobs, chairman and chief executive officer of QXO. “We will be applying our proven playbook to a platform ripe to deliver above-market organic growth and significant margin expansion.”
Stuart Randle, Beacon’s chairman, said, “Since QXO made its initial offer last November, we have evaluated strategic alternatives to enhance value for all of our shareholders. Following our Board’s comprehensive review, we concluded that this transaction is in the best interests of Beacon and its shareholders given the immediate premium and certainty of value in cash it offers, particularly in an uncertain environment.”
Julian Francis, president and chief executive officer of Beacon, said, “Since the launch of Ambition 2025 three years ago, we successfully transformed Beacon, delivering superior financial and operational results. We have a highly differentiated business with multiple paths to success, margin expansion and value creation, and thanks to the incredible talent and dedication of our employees, I know Beacon has a bright future ahead. We will now enter a new chapter of growth, true to our mission to help our customers build more.”
Terms of the deal
On January 27, 2025, QXO commenced an all-cash tender offer to acquire all of the outstanding shares of Beacon. QXO today announced that it has extended its current tender offer to expire at 5:00 p.m., New York City Time, on March 31, 2025. QXO will amend its current tender offer on or prior to the new expiration date to reflect the terms of the definitive merger agreement with Beacon, including to reflect an offer price of $124.35 per share in cash. Beacon will also amend its recommendation statement on Schedule 14D-9 in support of such amended tender offer.
In connection with the transaction, QXO has withdrawn its nomination of 10 independent director nominees for election at Beacon’s 2025 annual meeting of shareholders and Beacon has exempted the tender offer from its previously adopted shareholder rights plan.
The acquisition has received antitrust clearance in the U.S. and Canada. QXO has $5 billion of cash and secured financing commitments covering the full purchase price, including debt refinancing and transaction costs. As reported earlier this week, QXO has also entered into purchase agreements with certain institutional investors for an $830 million private placement financing, subject to the completion of the Beacon acquisition.
