QXO Receives Antitrust Clearance for Acquisition of Beacon Roofing Supply

Rhea-AI Summary

QXO (NYSE: QXO) has secured antitrust clearance in both the U.S. and Canada for its proposed acquisition of Beacon Roofing Supply (Nasdaq: BECN). The company received expiration of the Hart-Scott-Rodino waiting period and early termination from the Canadian Competition Bureau. QXO's all-cash tender offer stands at $124.25 per share, representing a premium above Beacon's historical trading high.

The offer remains open until midnight (NYC time) on February 24, 2025. QXO, with committed financing in place, is ready to complete the acquisition shortly after the tender expiration. The transaction has no financing or due diligence conditions. QXO's CEO Brad Jacobs has called on Beacon to remove its poison pill provision, describing it as 'shareholder-unfriendly.'

Positive

• Secured all necessary regulatory approvals for acquisition
• All-cash offer at $124.25 per share represents historical high for stock
• No financing or due diligence conditions attached to deal
• Ready for immediate transaction completion

Negative

• Beacon's poison pill provision could impede acquisition completion

Insights

M&A Specialist

The receipt of antitrust clearances from both U.S. and Canadian authorities marks a pivotal milestone in QXO's pursuit of Beacon Roofing Supply. This regulatory green light eliminates a major hurdle in the $124.25 per share all-cash acquisition, significantly increasing the probability of deal completion.

The transaction structure is particularly compelling for several reasons. First, the offer comes with no financing contingencies or due diligence conditions - a strong indication of QXO's commitment and confidence in the deal. The involvement of Morgan Stanley as lead advisor adds further credibility to the transaction's execution capabilities.

The primary obstacle now lies in Beacon's poison pill defense mechanism - a shareholder rights plan designed to prevent hostile takeovers by making them prohibitively expensive. While poison pills can protect companies from opportunistic buyers, they can also entrench management at shareholders' expense. In this case, with QXO offering an all-time high price and having secured both regulatory approvals and committed financing, the poison pill appears to be primarily serving management interests rather than shareholders.

The deal's structure offers several advantages for Beacon shareholders:

• Immediate liquidity at a premium price
• No exposure to execution or financing risks
• Clean exit opportunity without contingencies

The February 24 tender deadline creates a sense of urgency and puts pressure on Beacon's board to respond. The unconditional nature of the offer, combined with secured regulatory approvals, positions QXO strongly in this corporate contest. For the building materials sector, this deal could signal increased consolidation activity, particularly given the strategic importance of distribution networks in the roofing supply chain.

Calls on Beacon to Remove Shareholder-Unfriendly Poison Pill

GREENWICH, Conn., Feb. 12, 2025 (GLOBE NEWSWIRE) -- QXO, Inc. (NYSE: QXO) announced today that it has obtained antitrust clearance in both the U.S. and Canada for its acquisition of Beacon Roofing Supply, Inc. (Nasdaq: BECN), paving the way for QXO to close the transaction quickly. The company confirmed that the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act has expired and that it has received early termination of the waiting period from the Canadian Competition Bureau.

“With committed financing in place and these necessary regulatory approvals secured, QXO is prepared to complete this acquisition and deliver immediate, compelling value to Beacon shareholders,” said Brad Jacobs, chairman and chief executive officer of QXO. "Beacon should remove its shareholder-unfriendly poison pill so shareholders can benefit from our premium all-cash offer."

QXO’s all-cash tender offer for all of Beacon’s outstanding common stock of $124.25 per share, which is higher than Beacon’s stock has ever traded, remains open until 12:00 midnight (New York City time) at the end of February 24, 2025. QXO is prepared to complete the acquisition shortly after the tender expires, subject to the terms of the offer. Importantly, the transaction is not subject to any financing conditions or due diligence conditions.

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 and the individuals nominated by QXO (the “QXO Nominees”). QXO expects to determine and announce the QXO Nominees prior to the nomination deadline for the 2025 annual meeting of stockholders of Beacon. As of the date of this communication, other than 100 shares of common stock of Beacon beneficially owned by QXO, none of the participants who have been identified has any direct or indirect interest, by security holdings or otherwise, in Beacon.

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

FAQ

What is the per-share price QXO is offering for Beacon Roofing Supply?

QXO is offering $124.25 per share in an all-cash tender offer for Beacon Roofing Supply.

When does QXO's tender offer for Beacon Roofing Supply expire?

The tender offer expires at 12:00 midnight (New York City time) at the end of February 24, 2025.

What regulatory approvals has QXO received for the Beacon acquisition?

QXO has received antitrust clearance in both the U.S. (Hart-Scott-Rodino Act) and Canada (Canadian Competition Bureau).

What is preventing QXO from immediately completing the Beacon acquisition?

Beacon's poison pill provision is currently preventing the immediate completion of the acquisition.

Are there any financing conditions attached to QXO's acquisition of Beacon?

No, the transaction has no financing conditions or due diligence conditions attached.