QXO Extends Tender Offer to Acquire Beacon Roofing Supply

Rhea-AI Summary

QXO (NYSE: QXO) has extended its all-cash tender offer to acquire Beacon Roofing Supply (Nasdaq: BECN) until March 10, 2025. The offer stands at $124.25 per share, significantly higher than recent insider sales by Beacon's chairman (21% at $94.80) and CEO (10% at $97.91).

The tender offer has already secured approximately 11,810,616 shares (19.18%) of outstanding shares, despite Beacon's Board implementing a poison pill to obstruct the completion. QXO has obtained antitrust clearance in both the U.S. and Canada, with no financing or due diligence conditions pending.

QXO highlights Beacon's weak performance, including missed Q4 2024 expectations for revenue, organic growth, and EBITDA, with Q1 2025 EBITDA guidance 40% below consensus. The acquisition is fully financed through commitments from Goldman Sachs, Morgan Stanley, Citi, Crédit Agricole, Wells Fargo, and Mizuho, combined with QXO's cash reserves.

Positive

• All-cash offer at $124.25 per share, premium to recent insider sales
• 19.18% of shares already tendered
• Antitrust clearance obtained in US and Canada
• Full financing secured from major banks
• No financing or due diligence conditions pending

Negative

• Beacon Board implementing poison pill to block acquisition
• Beacon's Q4 2024 missed revenue and EBITDA expectations
• Q1 2025 EBITDA guidance 40% below consensus
• Board resistance to shareholder-favorable offer

Insights

Financial Analyst

QXO's extension of its tender offer for Beacon Roofing Supply at $124.25 per share reveals a determined acquisition strategy despite board resistance. The 19.18% of shares already tendered signals meaningful shareholder interest, especially given Beacon's implementation of a poison pill defense mechanism.

The offer price represents a significant premium over recent insider sales—Beacon's chairman sold 21% of his holdings at $94.80 and the CEO sold 10% at $97.91. This 26-30% premium suggests QXO sees substantial untapped value in Beacon despite its underperformance (Q4 revenue and EBITDA misses, Q1 2025 EBITDA guidance 40% below consensus).

QXO has secured comprehensive financing through multiple tier-one institutions including Goldman Sachs and Morgan Stanley, demonstrating both deal credibility and favorable lending terms. The acquisition appears to be proceeding methodically with regulatory hurdles already cleared (antitrust approvals in US and Canada).

The board's resistance through a poison pill indicates potential governance concerns—they're preventing shareholders from realizing immediate value substantially above current trading levels. This extension suggests QXO's confidence in eventually securing the necessary shares despite these defensive measures, potentially through increasing pressure on the board from large institutional shareholders who want to capture the premium.

M&A Strategist

This tender offer extension reveals a classic contested acquisition scenario where QXO is employing a direct-to-shareholder approach to overcome board opposition. The one-week extension suggests QXO believes additional shareholders can be convinced to tender their shares, increasing pressure on Beacon's board.

QXO's highlighting of insider stock sales at significantly lower prices ($94.80 and $97.91) compared to their $124.25 offer is a strategic communication tactic designed to create narrative tension between management actions and board decisions. By emphasizing Beacon's recent underperformance, QXO is attempting to undermine confidence in current leadership.

The poison pill implementation by Beacon's board indicates they believe either: 1) QXO's offer substantially undervalues the company despite recent performance issues, 2) they have strategic alternatives they're pursuing, or 3) they're simply buying time to negotiate better terms.

With 19.18% of shares already tendered despite board opposition, QXO has established meaningful shareholder support. The fully secured financing and regulatory clearances eliminate potential deal obstacles, putting maximum pressure on Beacon's board. Their characterization of tender levels as "above expectations" suggests they're positioning for a potential proxy fight if the board continues resisting.

The next week will be critical—if tender percentages significantly increase, Beacon's board may be forced to engage in negotiations or risk shareholder litigation for failing to consider a credible premium offer amid declining performance metrics.

GREENWICH, Conn.--(BUSINESS WIRE)-- QXO, Inc. (NYSE: QXO) announced today that it is extending its all-cash tender offer to acquire all outstanding shares of Beacon Roofing Supply, Inc. (Nasdaq: BECN) for $124.25 per share.

The tender offer, which was scheduled to expire at 5:00 p.m. (New York City time) on March 3, 2025, will remain open until 5:00 p.m. (New York City time) on March 10, 2025. QXO is prepared to complete the acquisition shortly after the tender expires, subject to the terms of the offer. The transaction is not dependent on any financing or due diligence conditions, and QXO has obtained antitrust clearance in both the U.S. and Canada.

"Beacon’s chairman, Stuart Randle, recently sold 21% of his shares at $94.80 per share, and CEO Julian Francis sold 10% of his shares at $97.91 per share—yet the Board continues to block its own shareholders from accepting QXO’s $124.25 per share all-cash offer,” said Brad Jacobs, chairman and chief executive officer of QXO. “The Board’s resistance is even more indefensible given Beacon’s weak performance, missing Q4 2024 expectations for revenue, organic growth and EBITDA, while guiding Q1 2025 EBITDA 40% below consensus."

The full terms, conditions and other details of the tender offer are available in the offering documents filed with the Securities and Exchange Commission. To learn more about QXO’s offer and how it benefits Beacon shareholders, visit www.qxo.com/beacon.

Computershare Trust Company, N.A., the depositary and paying agent for the tender offer, has reported that, as of 5:00 p.m. (New York City time) on March 3, 2025, approximately 11,810,616 shares have been validly tendered and not withdrawn, representing approximately 19.18% of the issued and outstanding shares. Shareholders who have already tendered their Shares do not need to take further action in response to this extension. Beacon shareholders who have not yet tendered their shares are encouraged to do so promptly. For assistance, shareholders may contact Innisfree M&A Incorporated, the information agent for the tender offer, at +1 (888) 750-5834. The level of tendered shares is above expectations at this stage, particularly since the Beacon Board has implemented a shareholder-unfriendly poison pill designed to obstruct the completion of the tender offer.

Secured Financing in Place

QXO has secured full financing commitments from Goldman Sachs, Morgan Stanley, Citi, Crédit Agricole, Wells Fargo and Mizuho. The proceeds from the financing commitments, together with QXO’s cash on hand, will be sufficient to pay 100% of the purchase consideration, any required refinancing of Beacon’s debt, and associated transaction fees and expenses.

Advisors

Morgan Stanley & Co. LLC is acting as lead financial advisor to QXO, and Paul, Weiss, Rifkind, Wharton & Garrison LLP is acting as legal counsel.

About QXO

QXO provides technology solutions, primarily to clients in the manufacturing, distribution and service sectors. The company provides consulting and professional services, including specialized programming, training and technical support, and develops proprietary software. As a value-added reseller of business application software, QXO offers solutions for accounting, financial reporting, enterprise resource planning, warehouse management systems, customer relationship management, business intelligence and other applications. QXO plans to become a tech-forward leader in the $800 billion building products distribution industry. The company is targeting tens of billions of dollars of annual revenue in the next decade through accretive acquisitions and organic growth. Visit www.qxo.com for more information.

Forward-Looking Statements

This communication contains forward-looking statements. Statements that are not historical facts, including statements about beliefs, expectations, targets, goals, regulatory approval timing and nominating directors are forward-looking statements. These statements are based on plans, estimates, expectations and/or goals at the time the statements are made, and readers should not place undue reliance on them. In some cases, readers can identify forward-looking statements by the use of forward-looking terms such as “may,” “will,” “should,” “expect,” “opportunity,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “target,” “goal,” or “continue,” or the negative of these terms or other comparable terms. Forward-looking statements involve inherent risks and uncertainties and readers are cautioned that a number of important factors could cause actual results to differ materially from those contained in any such forward-looking statements. Such factors include but are not limited to: the ultimate outcome of any possible transaction between QXO, Inc. (“QXO”) and Beacon Roofing Supply, Inc. (“Beacon”), including the possibility that the parties will not agree to pursue a business combination transaction or that the terms of any definitive agreement will be materially different from those proposed; uncertainties as to whether Beacon will cooperate with QXO regarding the proposed transaction; the ultimate result should QXO commence a proxy contest for election of directors to Beacon’s Board of Directors; QXO’s ability to consummate the proposed transaction with Beacon; the conditions to the completion of the proposed transaction, including the receipt of any required shareholder approvals and any required regulatory approvals; QXO’s ability to finance the proposed transaction; the substantial indebtedness QXO expects to incur in connection with the proposed transaction and the need to generate sufficient cash flows to service and repay such debt; that operating costs, customer loss and business disruption (including, without limitation, difficulties in maintaining relationships with employees, customers or suppliers) may be greater than expected following the proposed transaction or the public announcement of the proposed transaction; QXO’s ability to retain certain key employees; and general economic conditions that are less favorable than expected. QXO cautions that forward-looking statements should not be relied on as predictions of future events, and these statements are not guarantees of performance or results. Forward-looking statements herein speak only as of the date each statement is made. QXO does not assume any obligation to update any of these statements in light of new information or future events, except to the extent required by applicable law.

Important Additional Information and Where to Find It

This communication is for informational purposes only and does not constitute a recommendation, an offer to purchase or a solicitation of an offer to sell Beacon securities. QXO and Queen MergerCo, Inc. (the “Purchaser”) filed a Tender Offer Statement on Schedule TO with the Securities and Exchange Commission (the “SEC”) on January 27, 2025, and Beacon filed a Solicitation/Recommendation Statement on Schedule 14D-9 with respect to the tender offer with the SEC on February 6, 2025. Investors and security holders are urged to carefully read the Tender Offer Statement (including the Offer to Purchase, the related Letter of Transmittal and certain other tender offer documents, as each may be amended or supplemented from time to time) and the Solicitation/Recommendation Statement as these materials contain important information that investors and security holders should consider before making any decision regarding tendering their common stock, including the terms and conditions of the tender offer. The Tender Offer Statement, Offer to Purchase, Solicitation/Recommendation Statement and related materials are filed with the SEC, and investors and security holders may obtain a free copy of these materials and other documents filed by QXO and Beacon with the SEC at the website maintained by the SEC at www.sec.gov. In addition, the Tender Offer Statement and other documents that QXO and the Purchaser file with the SEC will be made available to all investors and security holders of Beacon free of charge from the information agent for the tender offer: Innisfree M&A Incorporated, 501 Madison Avenue, 20th Floor, New York, NY 10022, toll-free telephone: +1 (888) 750-5834.

QXO and the other participants intend to file a preliminary proxy statement and accompanying WHITE universal proxy card with the SEC to be used to solicit proxies for, among other matters, the election of its slate of director nominees at the 2025 Annual Meeting of stockholders of Beacon. QXO strongly advises all stockholders of Beacon to read the preliminary proxy statement, any amendments or supplements to such proxy statement, and other proxy materials filed by QXO with the SEC as they become available because they will contain important information. Such proxy materials will be available at no charge on the SEC’s website at www.sec.gov and at QXO’s website at investors.qxo.com. In addition, the participants in this proxy solicitation will provide copies of the proxy statement, and other relevant documents, without charge, when available, upon request. Requests for copies should be directed to the participants’ proxy solicitor.

Certain Information Concerning the Participants

The participants in the proxy solicitation are anticipated to be QXO, Brad Jacobs, Ihsan Essaid, Matt Fassler, Mark Manduca, Sheree Bargabos, Paul Camuti, Karel Czanderna, Jonathan Foster, Mauro Gregorio, Michael Lenz, Teresa May, Stephen Newlin, Joseph Reitmeier and Wendy Whiteash. As of the date of this communication, QXO owns 100 shares of common stock of Beacon in record name and Ms. Czanderna may be deemed to beneficially own 10 shares of common stock of Beacon held in a trust, for which Ms. Czanderna’s husband serves as trustee. As of the date of this communication, none of the other participants has any direct or indirect interest, by security holdings or otherwise, in Beacon.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250304110762/en/

Media Contacts



Joe Checkler

joe.checkler@qxo.com

203-609-9650



Steve Lipin / Lauren Odell

Gladstone Place Partners

212-230-5930



Investor Contacts



Mark Manduca

mark.manduca@qxo.com

203-321-3889



Scott Winter / Jonathan Salzberger

Innisfree M&A Incorporated

212-750-5833

Source: QXO, Inc

FAQ

What is the extended deadline for QXO's tender offer to acquire Beacon Roofing Supply?

The tender offer has been extended to March 10, 2025, at 5:00 p.m. New York City time.

How much is QXO offering per share for Beacon Roofing Supply stock?

QXO is offering $124.25 per share in an all-cash tender offer.

What percentage of Beacon Roofing Supply shares have been tendered to QXO so far?

Approximately 11,810,616 shares (19.18% of outstanding shares) have been validly tendered.

How does QXO's offer compare to recent insider sales at Beacon Roofing Supply?

QXO's offer of $124.25 is significantly higher than recent insider sales: chairman sold at $94.80 and CEO at $97.91 per share.

What is Beacon Roofing Supply's recent financial performance according to QXO?

Beacon missed Q4 2024 expectations for revenue, organic growth, and EBITDA, with Q1 2025 EBITDA guidance 40% below consensus.