QXO has set its sight on its next acquisition target.
The company sent a proposal to the president and CEO of Gypsum Management & Supply (GMS) to acquire all outstanding GMS shares in a transaction valued at $5 billion. The valuation—$95.20 per share in cash—reflects a 27% premium over GMS’s 60-day volume-weighted average price of $74.82.
GMS services residential and commercial contractors from a network of over 300 distribution centers offering wallboard, ceilings, steel framing, and complementary construction products. In addition, the company operates nearly 100 tool sales, rental, and service centers across the United States and Canada. In the distributor’s fiscal fourth quarter results from June 18, the company generated net sales of $5.5 billion and net profit of $115.5 million.
“Our conviction in acquiring GMS is supported by its attractive positions in wallboard, ceiling tile, and steel framing, extensive distribution network, and broad exposure to both residential and commercial end markets,” QXO CEO Brad Jacobs and chief financial officer Ihsan Essaid wrote in the company’s proposal to GMS.
GMS confirmed receipt of the proposal and the company’s board of directors will review and evaluate it to determine the course of action that it believes is in the best interest for GMS and its shareholders. GMS said it does not plan to comment further on the proposal until the board has completed its review.
Prior to its proposal to acquire GMS, QXO made a splash in the building products sector with its $11 billion acquisition of Beacon Roofing Supply in March. Beacon distributes products including roofing materials and complementary products such as siding and waterproofing from more than 580 branches across the United States and Canada.
Todd Tomalak, principal, advisory of building products for Zonda, says QXO’s proposal to acquire GMS is intriguing, demonstrating the company’s broad objective to expand into verticals beyond roofing.
“The offer demonstrates the catalyst that challenging macro headwinds provide for QXO to consolidate building product distribution opportunistically,” Tomalak says. “Our research suggests 2025 is a strategically important year for distribution shifts in building products and housing, exacerbated by builders and ‘complex pros’ shifting where they purchase. This combination of QXO with GMS further reinforces our view that the distribution landscape is shifting faster than many expected.”
Tomalak added the timing of the proposal appeared “very deliberate,” coinciding directly with a challenging earnings report for GMS. For the full fiscal year 2025, ended April 30, organic net sales decreased 5.8%, net profit fell 58.2%, and adjusted EBITDA fell 18.6% compared to the 2024 fiscal year.
“We think the industry should take notice: Other similar opportunities may emerge amid a volatile second half of 2025, and we think QXO will be interesting to watch,” Tomalak notes.
In its letter to GMS, QXO reiterated its ability to move quickly to make a deal, with two weeks of confirmatory due diligence, including management meetings, while it negotiates definitive transaction documentation. Goldman Sachs and Morgan Stanley are acting as financial advisors to QXO and Paul, Weiss, Rifkind, Wharton & Garrison are acting as legal counsel.
QXO, founded in 2023, has plans to become the leading player in the $800 billion building products distribution industry. The company is targeting $50 billion in annual revenues within the next decade through accretive acquisitions and organic growth. The Beacon acquisition positioned QXO as the largest publicly traded distributor of roofing, waterproofing, and complementary building products in the United States. The company believes the building products distribution industry’s “nascent use” of technology, AI, and B2B e-commerce represents a “compelling opportunity for QXO as a technology-forward operation.
