QXO responds to Beacon Roofing's rejection of its $11 billion acquisition offer, emphasizing shareholder interests and transaction certainty.
Quiver AI Summary
On February 6, 2025, QXO, Inc. responded to the rejection of its $124.25 per share cash offer by Beacon Roofing Supply, which the company asserts undervalues Beacon's shares. QXO's offer, initiated on January 27, represents a significant 37% premium over Beacon's recent trading prices and is the highest ever for its shares. QXO criticized Beacon's board for not providing valid reasons for the rejection or demonstrating a viable alternative offer. QXO chairman Brad Jacobs emphasized the benefits of their offer, including certainty and quick closure without financing or regulatory hindrances. The tender offer will remain open until February 24, 2025. QXO is actively pursuing its goal of becoming a leader in the building products distribution sector, targeting substantial revenue growth through acquisitions and organic development.
Potential Positives
- QXO's tender offer of $124.25 per share represents a 37% premium over Beacon Roofing Supply's recent trading price, highlighting QXO's strong commitment to provide value to shareholders.
- Beacon's Board has not provided a convincing rationale for rejecting QXO's offer, indicating potential dissatisfaction among Beacon's shareholders.
- QXO asserts that the acquisition can close quickly with no regulatory or financing delays, which could assure investors of a streamlined transaction process.
- QXO aims to become a tech-forward leader in the $800 billion building products distribution industry, showcasing its ambitions for substantial growth through potential acquisitions and organic growth strategies.
Potential Negatives
- Beacon Roofing Supply's rejection of QXO's $124.25 per share offer raises concerns about QXO's valuation and credibility, suggesting that its bid may not be as compelling as it claims.
- The delay in Beacon's announcement of newly constructed 2028 financial projections could signal that QXO’s tender offer may not align with Beacon’s long-term financial strategies, reflecting uncertainty around the proposed acquisition.
- Forward-looking statements included in the release highlight significant risks associated with the transaction, including the possibility that the acquisition may not go through, which could negatively impact QXO's financial plans and investor confidence.
FAQ
What is QXO's recent offer to Beacon Roofing Supply?
QXO has made an all-cash offer of $124.25 per share for Beacon, valuing the company at approximately $11 billion.
How did Beacon Roofing Supply's Board respond to QXO's offer?
Beacon's Board rejected QXO's offer, claiming it undervalues the company, despite no substantiation for this assertion.
What is the completion timeline for QXO's tender offer?
QXO's tender offer will be open until 12:00 midnight, New York City time, on February 24, 2025.
Who advises QXO on this acquisition?
Morgan Stanley & Co. LLC is acting as QXO's lead financial advisor, with Paul, Weiss, Rifkind, Wharton & Garrison LLP serving as legal counsel.
What industries does QXO operate in?
QXO provides technology solutions primarily for the manufacturing, distribution, and service sectors, aiming for growth in the building products distribution industry.
Disclaimer: This is an AI-generated summary of a press release distributed by GlobeNewswire. The model used to summarize this release may make mistakes. See the full release here.
$QXO Insider Trading Activity
$QXO insiders have traded $QXO stock on the open market 2 times in the past 6 months. Of those trades, 0 have been purchases and 2 have been sales.
Here’s a breakdown of recent trading of $QXO stock by insiders over the last 6 months:
- PARTNERS, LP MFN has made 0 purchases and 2 sales selling 7,795,894 shares for an estimated $117,328,204.
To track insider transactions, check out Quiver Quantitative's insider trading dashboard.
Full Release
GREENWICH, Conn., Feb. 06, 2025 (GLOBE NEWSWIRE) -- QXO, Inc. (NYSE: QXO) today issued the following statement in response to the announcement by Beacon Roofing Supply, Inc. (Nasdaq: BECN) that its Board of Directors has rejected QXO’s all-cash $124.25 per share offer.
On January 27, 2025, QXO commenced a tender offer to purchase all outstanding shares of Beacon for $124.25 per share in cash, for an aggregate enterprise value of approximately $11 billion, representing a 37% premium to Beacon’s 90-day unaffected volume-weighted average price of $91.02 per share as of November 15, 2024. QXO’s offer price is also higher than Beacon’s shares have ever traded. Beacon’s Board offers no basis for its assertion that QXO's premium offer undervalues Beacon's shares, and the trading price of Beacon’s shares indicates that Beacon’s Board is wrong.
“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 Brad Jacobs, chairman and chief executive officer of QXO. "Beacon’s filing shows no indication of an actionable third-party alternative.
We have made a very compelling offer, and Beacon should let its shareholders decide what is in their best interest.”
Notably, Beacon confirmed today it would wait to announce newly constructed 2028 financial projections until March 13, more than a month from today and more than three months from its Board’s initial rejection of QXO‘s offer. There is no reason for Beacon to introduce yet another delay by waiting to disclose its newly formulated projections.
QXO's tender offer will be outstanding until 12:00 midnight, New York City time, at the end of February 24, 2025, and it is prepared to complete the acquisition shortly after the tender expires, subject to the terms of the offer. The transaction is not subject to any financing conditions or due diligence conditions, and QXO expects that the waiting periods under the Hart-Scott-Rodino Act and the Canadian Competition Act will have expired or been waived by the time the tender offer expires.
Morgan Stanley & Co. LLC is acting as lead financial advisor to QXO, and Paul, Weiss, Rifkind, Wharton & Garrison LLP is acting as legal counsel.
About QXO
QXO provides technology solutions, primarily to clients in the manufacturing, distribution and service sectors. The company provides consulting and professional services, including specialized programming, training and technical support, and develops proprietary software. As a value-added reseller of business application software, QXO offers solutions for accounting, financial reporting, enterprise resource planning, warehouse management systems, customer relationship management, business intelligence and other applications. QXO plans to become a tech-forward leader in the $800 billion building products distribution industry. The company is targeting tens of billions of dollars of annual revenue in the next decade through accretive acquisitions and organic growth. Visit
QXO.com
for more information.
Forward-Looking Statements
This communication contains forward-looking statements. Statements that are not historical facts, including statements about beliefs, expectations, targets, goals, regulatory approval timing and nominating directors are forward-looking statements. These statements are based on plans, estimates, expectations and/or goals at the time the statements are made, and readers should not place undue reliance on them. In some cases, readers can identify forward-looking statements by the use of forward-looking terms such as “may,” “will,” “should,” “expect,” “opportunity,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “target,” “goal,” or “continue,” or the negative of these terms or other comparable terms. Forward-looking statements involve inherent risks and uncertainties and readers are cautioned that a number of important factors could cause actual results to differ materially from those contained in any such forward-looking statements. Such factors include but are not limited to: the ultimate outcome of any possible transaction between QXO, Inc. (“QXO”) and Beacon Roofing Supply, Inc. (“Beacon”), including the possibility that the parties will not agree to pursue a business combination transaction or that the terms of any definitive agreement will be materially different from those proposed; uncertainties as to whether Beacon will cooperate with QXO regarding the proposed transaction; the ultimate result should QXO commence a proxy contest for election of directors to Beacon’s board of directors; QXO’s ability to consummate the proposed transaction with Beacon; the conditions to the completion of the proposed transaction, including the receipt of any required shareholder approvals and any required regulatory approvals; QXO’s ability to finance the proposed transaction; the substantial indebtedness QXO expects to incur in connection with the proposed transaction and the need to generate sufficient cash flows to service and repay such debt; that operating costs, customer loss and business disruption (including, without limitation, difficulties in maintaining relationships with employees, customers or suppliers) may be greater than expected following the proposed transaction or the public announcement of the proposed transaction; QXO’s ability to retain certain key employees; and general economic conditions that are less favorable than expected. QXO cautions that forward-looking statements should not be relied on as predictions of future events, and these statements are not guarantees of performance or results. Forward-looking statements herein speak only as of the date each statement is made. QXO does not assume any obligation to update any of these statements in light of new information or future events, except to the extent required by applicable law.
Important Additional Information and Where to Find It
This communication is for informational purposes only and does not constitute a recommendation, an offer to purchase or a solicitation of an offer to sell Beacon securities. QXO and Queen MergerCo, Inc. (the “Purchaser”) filed a Tender Offer Statement on Schedule TO with the Securities and Exchange Commission (the “SEC”) on January 27, 2025, and Beacon filed a Solicitation/Recommendation Statement on Schedule 14D-9 with respect to the tender offer with the SEC on February 6, 2025. Investors and security holders are urged to carefully read the Tender Offer Statement (including the Offer to Purchase, the related Letter of Transmittal and certain other tender offer documents, as each may be amended or supplemented from time to time) and the Solicitation/Recommendation Statement, as these materials contain important information that investors and security holders should consider before making any decision regarding tendering their common stock, including the terms and conditions of the tender offer. The Tender Offer Statement, Offer to Purchase, Solicitation/Recommendation Statement and related materials are filed with the SEC, and investors and security holders may obtain a free copy of these materials and other documents filed by QXO and Beacon with the SEC at the website maintained by the SEC at www.sec.gov. In addition, the Tender Offer Statement and other documents that QXO and the Purchaser file with the SEC will be made available to all investors and security holders of Beacon free of charge from the information agent for the tender offer: Innisfree M&A Incorporated, 501 Madison Avenue, 20th Floor, New York, NY 10022, toll-free telephone: +1 (888) 750-5834.
QXO and the other participants intend to file a preliminary proxy statement and accompanying WHITE universal proxy card with the SEC to be used to solicit proxies for, among other matters, the election of its slate of director nominees at the 2025 annual meeting of stockholders of Beacon. QXO strongly advises all stockholders of Beacon to read the preliminary proxy statement, any amendments or supplements to such proxy statement, and other proxy materials filed by QXO with the SEC as they become available because they will contain important information. Such proxy materials will be available at no charge on the SEC’s website at www.sec.gov and at QXO’s website at investors.qxo.com. In addition, the participants in this proxy solicitation will provide copies of the proxy statement, and other relevant documents, without charge, when available, upon request. Requests for copies should be directed to the participants’ proxy solicitor.
Certain Information Concerning the Participants
The participants in the proxy solicitation are anticipated to be QXO, Brad Jacobs, Ihsan Essaid, Matt Fassler, Mark Manduca and the individuals nominated by QXO (the “QXO Nominees”). QXO expects to determine and announce the QXO Nominees prior to the nomination deadline for the 2025 annual meeting of stockholders of Beacon. As of the date of this communication, other than 100 shares of common stock of Beacon beneficially owned by QXO, none of the participants that have been identified has any direct or indirect interest, by security holdings or otherwise, in Beacon.
Media Contacts
Joe Checkler
joe.checkler@qxo.com
203-609-9650
Steve Lipin / Lauren Odell
Gladstone Place Partners
212-230-5930
Investor Contacts
Mark Manduca
mark.manduca@qxo.com
203-321-3889
Scott Winter / Jonathan Salzberger
Innisfree M&A Incorporated
212-750-5833
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
