Bullish indicating open at $55-$60, IPO prices at $37
GREENWICH, Conn. - QXO, Inc. (NYSE: QXO) has received antitrust clearance from both the U.S. and Canada for its planned acquisition of Beacon Roofing Supply, Inc. (Nasdaq: NASDAQ:BECN), it was announced Monday. Beacon, currently valued at $7.36 billion by market capitalization, has shown strong financial performance with nearly 10% revenue growth over the last twelve months. This regulatory approval moves QXO one step closer to finalizing the deal, which is expected to deliver significant value to Beacon shareholders.
The company has confirmed the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act and the early termination of the waiting period from the Canadian Competition Bureau. With these regulatory hurdles cleared and committed financing secured, QXO is poised to swiftly complete the acquisition process.
QXO’s chairman and CEO, Brad Jacobs, stated the company is ready to finalize the acquisition immediately following the close of its all-cash tender offer, which is scheduled to end at midnight on February 24, 2025. The offer of $124.25 per share for Beacon’s outstanding common stock is noted to be higher than the stock’s historical trading prices. Jacobs also urged Beacon to remove its "poison pill" – a defense strategy against hostile takeovers – to allow shareholders to benefit from the offer.
The proposed transaction is not contingent upon any financing or due diligence conditions, indicating QXO’s confidence in the deal’s completion. Morgan Stanley & Co (NYSE:MS). LLC and Paul, Weiss, Rifkind, Wharton & Garrison LLP are serving as financial advisor and legal counsel to QXO, respectively.
QXO, a provider of technology solutions and consulting services, aims to leverage this acquisition to become a leader in the $800 billion building products distribution industry. The company has set a target to achieve tens of billions of dollars in annual revenue over the next decade through strategic acquisitions and organic growth.
The information in this article is based on a press release statement. While the acquisition appears poised for completion, it’s important to note that forward-looking statements are subject to inherent risks and uncertainties, and actual results could differ materially from expectations.
In other recent news, Beacon Roofing Supply has formally rejected QXO’s acquisition offer of $124.25 per share, a move that has prompted Stifel to downgrade the company’s stock rating from Buy to Hold, adjusting the price target to $122.55. Analysts at Stifel revised their scenario analysis, favoring QXO’s potential acquisition of Beacon Roofing Supply at the offered price. They believe the likelihood of an alternative strategic acquirer emerging is now significantly less probable.
Despite Beacon Roofing Supply’s search for potential acquirers, Stifel analysts suggest the lack of a formal process diminishes the chances of a competitive bid. On the other hand, RBC Capital Markets maintains an Outperform rating on Beacon Roofing Supply with a steady price target of $130.00. They suggest Beacon might present a strategic plan during their investor day that could justify a valuation significantly higher than QXO’s bid.
Stifel analysts previously maintained a Buy rating on Beacon Roofing Supply with a price target of $131.00. They noted that the company’s recent adoption of a Stockholder Rights Agreement could potentially deter hostile takeovers, giving the Board of Directors additional time to consider its options. These developments are part of recent events that have shaped the current state of Beacon Roofing Supply.
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