Building-Products Distributor QXO Launching Hostile Bid for Beacon
QXO expected to take offer directly to shareholders after being rebuffed
Building-products distributor QXO QXO -1.79%decrease; red down pointing triangle is preparing to take its all-cash offer to acquire Beacon Roofing Supply BECN 1.62%increase; green up pointing triangle directly to shareholders after being rebuffed on several occasions, according to people familiar with the matter.
The details
QXO is planning to launch a hostile bid for Beacon as soon as Monday, the people said.
It will offer to buy all shares outstanding of Beacon for $124.25 per share, the same price it previously proposed, the people said. That would value Beacon at $7.7 billion, or roughly $11 billion including debt.
Beacon shares closed Friday at $118.42, giving the business a market value of around $7.3 billion. The shares have run up since mid-November, when The Wall Street Journal reported on the bid QXO had privately made to Beacon.
QXO hopes to clinch a deal quickly after its tender offer expires on Feb. 24, the people added.
The context
Herndon, Va.-based Beacon is the largest publicly traded distributor of roofing materials and complementary building products in the U.S. and Canada.
Earlier this month, QXO published a letter detailing its cash offer, which it said Beacon had refused to engage on. The offer was initially submitted on Nov. 11, it said.
QXO argued that its offer was compelling for shareholders and that it shouldn’t face any significant antitrust or other regulatory issues.
Beacon said in response that QXO’s proposal “significantly undervalues Beacon and fails to reflect the company’s growth strategy and upside potential.” It said it offered QXO the option to sign an NDA to share confidential management projections, but that QXO wasn’t interested.
QXO has said it secured financing for a deal and is prepared to nominate directors to Beacon’s board. The window for shareholder nominations at Beacon ends on Feb. 14, according to the company’s proxy materials.
The rationale
QXO, based in Greenwich, Conn., has a market value of around $5.6 billion. It is headed by Brad Jacobs, who has built multibillion-dollar companies in logistics and other sectors through acquisitions.
Jacobs and others agreed in late 2023 to invest roughly $1 billion into a small, publicly traded software company—SilverSun Technologies—and renamed it QXO. The company has yet to strike its first big deal.
Dealmaking in the building-materials space has been heating up. Home Depot last March struck a more than $18 billion deal, including debt, for SRS Distribution, a Beacon competitor.