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February 7, 2025

CT company doubles down on hostile takeover of Beacon Roofing Supply

QXO Brad Jacobs, chairman and CEO of QXO.
By Andrew Larson

Greenwich-based QXO, a publicly traded company in the building products distribution industry launched in June 2024 by billionaire investor Brad Jacobs, is aggressively seeking to acquire Beacon Roofing Supply Inc., a Fortune 500 company that distributes specialty building products.

Jacobs, a Greenwich resident, is known on Wall Street for his creative merger-and-acquisition strategies. He has founded five billion-dollar businesses, including logistics company XPO Inc., United Rentals Inc. and United Waste Systems Inc.

Jacobs is the 130th wealthiest person in the United States, according to the 2024 Forbes 400 rankings, and currently has a net worth of $8.5 billion.

Jacobs stepped down as CEO of XPO in November 2022, but remains chairman. He announced the launch of QXO in December 2023.

QXO focuses on acquiring and developing businesses that distribute products including lumber, doors, windows and landscaping supplies.

The corporate showdown began on Jan. 15, when QXO offered to acquire Beacon for about $11 billion, or $124.25 per share, in an all-cash deal. 

Beacon’s board rejected the offer, saying it undervalued the company. In response, QXO launched a tender offer on Jan. 27, directly approaching Beacon's shareholders with the same $124.25 per-share offer.

Beacon sought to prevent the hostile takeover by implementing defensive measures, including a "poison pill.”

Since then, QXO has said it is considering nominating its own slate of directors to Beacon's board at its 2025 annual meeting of stockholders, potentially leading to a proxy fight.

According to QXO, the $124.25 per-share offer is higher than Beacon’s shares have ever traded, and a 37% premium to Beacon’s 90-day unaffected volume-weighted average price of $91.02 per share as of Nov. 15, 2024.

On Thursday, Beacon Roofing officially rejected QXO's hostile bid, recommending that shareholders do the same.

In response, QXO on Thursday issued a statement urging the business to let shareholders decide whether to accept the offer.

“Our offer provides certainty, a significant premium in cash and the ability to close quickly with no regulatory delays, financing risks or diligence conditions," said Jacobs, chairman and CEO of QXO. "... We have made a very compelling offer, and Beacon should let its shareholders decide what is in their best interest.”

The tender offer will remain open until midnight on Feb. 24. QXO says it is prepared to finalize the acquisition shortly after that.

Beacon, headquartered in Herndon, Virginia, is a wholesale distributor of roofing, waterproofing and exterior products.

Beacon has more than 500 locations in the United States and Canada, including five in Connecticut – Hartford, Wallingford, North Haven, Danbury and Bridgeport.

Beacon’s share price has skyrocketed over the last month. Its stock was trading at just over $100 per share a month ago; on Friday morning, it was trading at about $120 per share. 

A report from investment banking firm Stifel issued Thursday says "we believe (Beacon) is fully valued at current levels," and that their analysis "favors QXO successfully acquiring Beacon" at $124.25 per share.

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