After taking its $11 billion acquisition offer to the Beacon shareholders two weeks ago, tech-forward building products startup QXO is telling them it has financing in place and is prepared to pay cash for the roofing supply company.
“Our compelling offer would get cash into the hands of Beacon shareholders immediately at a significant premium to the unaffected share price,” says QXO chairman and CEO Brad Jacobs.
The offer is to purchase all outstanding shares of $124.25 per share, a 37% premium above Beacon’s 90-day unaffected volume-weighted average price of $91.02 per share as of Nov. 14.
Beacon is a distributor of building products, including roofing materials and complementary products, such as siding and waterproofing, with more than 580 branches across all 50 U.S. states and seven provinces in Canada.
Beacon confirmed receipt of QXO’s “unsolicited tender offer” and said its board of directors will thoroughly evaluate the offer to determine the best course of action.
QXO intends to complete the acquisition quickly after the tender offer expires in 20 business days. In addition, QXO reiterated it intends to pursue all options to complete a transaction, including nominating directors for election at Beacon’s annual meeting.
Beacon said its board will issue its formal recommendations to shareholders within ten business days and urged shareholders to take no action at this time.
According to QXO, the proposed transaction is not subject to any contingencies related to financing or due diligence and the company 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.
In its news release acknowledging the offer from QXO, Beacon said the offer price remains unchanged from QXO’s Nov. 11 proposal which was unanimously rejected by the Beacon board of directors. The proposal from QXO represents a 17% premium to Beacon’s unaffected all-time high price of $105.84.
QXO has secured from Goldman Sachs, Morgan Stanley, Citi, Credit Agricole, Wells Fargo, and Mizuho. The offer and withdrawal rights of the offer are scheduled to expire at the end of Feb. 24 unless the offer is extended.
Jacobs founded QXO in 2023 with the intention to create a market leader in building products distribution and the company expects to begin trading on the New York Stock Exchange on Jan. 17. The company identifies the building products distribution industry’s “nascent use” of technology, AI, and B2B e-commerce as a “compelling opportunity” for QXO as a technology-forward operation.
