QXO, a startup with intentions of becoming a technology-forward player in the building products distribution industry, has entered into a purchase agreement with certain institutional and accredited investors for a new $620 million private placement financing of nearly 68 million shares of QXO common stock at a price of $9.14 per share.
The new private placement, which includes a $150 million investment from Affinity Partners, is expected to close on July 25. In addition, QXO announced it closed its previously reported $3.5 billion private placement financing on July 19.
Entrepreneur Brad Jacobs, with experience building multibillion-dollar companies in the trucking business, announced intentions of creating QXO in December of 2023 with the goal of becoming a “major force” in the building products distribution sector.
The company said following the closing of the new private placement, QXO will have no debt and cash of approximately $5 billion, reflecting the proceeds of its two private placements, and investments of $900 million from Jacobs Private Equity and $100 million from Sequoia Heritage. QXO plans to use the cash to grow its business through acquisitions.
Following the closing, QXO will have approximately 409.4 million outstanding shares of common stock. On a fully diluted basis, following the closing and giving effect to the conversion of the company’s 1.0 million outstanding shares of preferred stock and the exercise of the 219.0 million outstanding warrants issued with its preferred stock, as well as the exercise of the prefunded warrants sold in the prior private placement financing, QXO will have approximately 889.4 million outstanding shares of common stock.
According to its website, QXO plans to provide technology solutions, primarily to clients in the manufacturing, distribution, and service sectors. The company will offer solutions for accounting, financial reporting, enterprise resource planning, warehouse management systems, customer relationship management, and business intelligence and will develop and publish its own proprietary software.
“The building products distribution industry’s nascent use of technology, particularly AI and B2B e-commerce, represents a compelling opportunity for QXO as a tech-forward entrant,” the company’s strategy reads. “QXO’s combination of scale and innovation should elevate the customer experience, increase sales force effectiveness, and enable margin expansion.”
