Acquisition Vehicle QXO Targets Building Supplies Sector

QXO, a newly launched acquisition vehicle led by billionaire Brad Jacobs, has announced its first hostile bid for Beacon Roofing Supply, a major US-based roofing materials and building products distributor.

Investment Thesis

QXO aims to acquire businesses in the fragmented building products distribution sector, estimated to be worth approximately $800 billion annually in America and Europe. Jacobs has set aggressive revenue targets of $1 billion, $5 billion within three years, and tens of billions over the next decade.

Beacon Roofing Acquisition

QXO's $11 billion hostile offer for Beacon Roofing would provide it with control of a company with nearly $9.2 billion in sales and $435 million in net profits. This acquisition would offer a strategic platform for further deals in the sector.

Technology Focus

QXO will leverage its subsidiary SilverSun Technologies, a provider of tech applications, to drive digital transformation within acquired businesses. This aligns with the growing adoption of technology and AI in the building products industry.

Investor Support

QXO has raised $5 billion through private placements from prominent investors, including Jared Kushner of Affinity Partners. The company has also received backing from three top-performing equity managers.

Key Figures

* Brad Jacobs, QXO's Chairman and CEO, has a proven track record of successful deals and business building.
* QXO currently has a market value of $5.6 billion, rising to $11.2 billion on a diluted basis.

Questor's Recommendation

Questor recommends buying QXO shares. Jacobs' experience and the acquisition strategy in a high-growth sector make QXO an attractive investment.