Brad Jacobs’ latest company, QXO, which plans to develop a diffuse network of construction products suppliers through acquisitions, just armed itself with a lot more cash to do so.
At its most basic, QXO is a logistics play: putting a growing number of assets from a fragmented building supply chain ecosystem under one roof, linking them through a unified supply chain, and reaping the benefits of that efficiency.
It now has about $1.2 billion more it can use to complete that task, having completed 2025 with a single acquisition, the roughly $11 billion purchase of Beacon Roofing Supply.
QXO, founded by former XPO CEO Jacobs (NYSE:
In an interview with FreightWaves, Mark Manduca, QXO’s chief investment officer, said the other investors besides Apollos are asset manager Franklin Templeton and two pension funds. But Apollo Management is the largest investor.
Financing comes from the sale of the company’s convertible preferred stock. The plan to use it to make QXO (NYSE: QXO) bigger was in the first paragraph of the company’s press release. “The investment further strengthens QXO’s financial flexibility to pursue acquisition opportunities,” the prepared statement said.
The funds from the sale will not appear on the balance sheet as cash, Manduca said. But he added that in terms of using it to make an acquisition, it effectively serves the same function.
QXO’s balance sheet at the end of the third quarter reported cash of around $2.3 billion.
Proceeds from the preferred socks offering can be used to complete one acquisition or multiple deals worth more than $1.5 billion by July 15, depending on the terms of the transaction. If an acquisition is not made before that date, the ability to use the funds for a purchase may be extended by one year.
The dividend rate for preferred shares is 4.75%. They can be converted into common shares at a conversion price of $23.25 per share. That would produce about 47 million new QXO common shares, a small amount since the company owns 1.129 million fully diluted shares.
QXO does not pay dividends on its common stock.
QXO’s stock price soared on news of the Apollo-led deal. At approximately 11:30 a.m. Monday it stood at $23.26. rose $3.54, a gain of 17.95%. The 52-week low for QXO was $11.85 on February 25.
QXO attempted to acquire building products distributor GMS earlier this year, but lost to Home Depot (NYSE: HD).