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GREENWICH, Conn. - QXO, Inc. (NYSE: QXO), a provider of technology solutions primarily for the manufacturing, distribution, and service sectors, with a market capitalization of $5.7 billion and a strong financial health rating according to InvestingPro, has encountered resistance from Beacon Roofing Supply, Inc. (NASDAQ: NASDAQ:BECN) in its attempt to acquire the company. Beacon’s Board of Directors has declined QXO’s all-cash tender offer to purchase all outstanding shares of Beacon at $124.25 per share, an offer that values the roofing supply company at approximately $11 billion.
The offer, initiated on January 27, 2025, represents a 37% premium over Beacon’s 90-day unaffected volume-weighted average price as of November 15, 2024. Despite this, Beacon’s Board has dismissed the proposal, stating that it undervalues the company’s shares. QXO’s own stock has shown significant volatility, with a beta of 2.24 and a 26.8% price increase over the past six months, according to InvestingPro data. QXO’s bid is higher than any price at which Beacon’s shares have traded to date.
Brad Jacobs, chairman and CEO of QXO, emphasized the attractive nature of the offer, citing "certainty, a significant premium in cash and the ability to close quickly with no regulatory delays, financing risks or diligence conditions." He also noted that Beacon has not presented any alternative proposals that would be actionable. QXO’s tender offer is set to expire at midnight, New York City time, on February 24, 2025, with the company prepared to finalize the acquisition soon after, assuming all terms of the offer are met.
Beacon has decided to postpone the release of its 2028 financial projections until March 13, a move that QXO believes introduces unnecessary delay. The acquisition is not contingent upon financing conditions or due diligence, and QXO anticipates that regulatory periods under the Hart-Scott-Rodino Act and the Canadian Competition Act will have concluded by the offer’s expiration.
Morgan Stanley (NYSE:MS) & Co. LLC serves as the lead financial advisor to QXO, with Paul, Weiss, Rifkind, Wharton & Garrison LLP as legal counsel. QXO, aiming to become a tech-forward leader in the $800 billion building products distribution industry, plans to achieve tens of billions of dollars in annual revenue over the next decade through strategic acquisitions and organic growth.
This news is based on a press release statement from QXO, Inc.
In other recent news, QXO, Inc. has announced an all-cash tender offer to acquire Beacon Roofing Supply, Inc. for $124.25 per share, a deal estimated at around $11 billion. The offer, representing a 37% premium over Beacon’s average share price, is not contingent on financing or due diligence conditions. QXO’s chairman and CEO, Brad Jacobs, stated that the acquisition would provide immediate cash to Beacon shareholders at a significant premium and aligns with QXO’s vision to expand in the building products distribution industry.
However, Beacon Roofing Supply has rejected QXO’s proposal, stating that the offered price significantly undervalues the company. Beacon’s Board of Directors unanimously deemed the offer insufficient, citing the company’s growth prospects and future value creation potential. Beacon has attempted to engage with QXO to discuss valuation, subject to a standard non-disclosure agreement, which QXO declined.
QXO recently held its 2024 Annual Meeting, where stockholders approved several key proposals, including the election of directors and advisory votes on executive compensation and its frequency. The stockholders also ratified the appointment of Marcum LLP as the company’s independent registered public accounting firm for the fiscal year 2024. These developments highlight the ongoing business activities of both QXO and Beacon Roofing Supply.
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