QXO describes its vision
Investors and distribution industry leaders received the best look yet into the new QXO. That glimpse of QXO came during a presentation by founder Brad Jacobs at the Wolfe Research Annual Conference in New York.
During the May 20 event, Jacobs added color to QXO’s plans to be the tech-enabled leader in the $800 billion building products distribution industry. And since acquiring Beacon Roofing Supply in late April,
QXO can point to several achievements, including:
• On day one, rebranding to QXO took place, including the company e-commerce site and the the company mobile app.;
• Instituted a sales “Win room” for lead generation;
• Initiated a rapid inventory rebalancing effort to enhance in-stocks on key SKUs by branch; and
• Completed first phase of talent assessment.
Beacon Roofing Supply served an an ideal springboard and a “smart first move," Jacobs said. “Roofing is a steady, predictable vertical, bolstered by strong long-term trends. Everyone has a roof—and roofs require upkeep.”
Beacon represents the first step toward a goal to achieve $50 billion in annual revenue within the next decade through a combination of accretive acquisitions and organic growth.
The company’s acquisition strategy includes looking at regional targets in roofing, waterproofing and complementary categories. It’s also seeking transformational deals in adjacent verticals.
“Our business plan is to do disciplined M&A, significantly improve the profitability of the acquired operations, then rinse, wash, repeat,” Jacobs said.
Jacobs painted a picture of a business with major tailwinds. “The U.S. housing market is currently undersupplied by approximately 4 million units. At today’s pace, it would take about 15 years of homebuilding to close that gap. Meanwhile, the average single-family home is over 40 years old and in need of repair and remodeling.”
Additionally, QXO estimates that there’s more than $2 trillion in projected infrastructure spending across North America over the next 20 years.
Jacobs also pointed to the "deep expertise" of the team assembled to lead QXO, with strengths in disciplined M&A, seamless integration, profit improvement, capital markets, culture building, logistics, and more.
