Company: QXO-PB
Filing Date: 2025-03-07
Form Type: DFAN14A
Source: 0000950142-25-000649
Chunk: 3

Company: QXO, Inc.
Filing Date: 2025-03-07
Form: DFAN14A
Chunk 3
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 settling at $117.18 — a record — up from $108.85 on Tuesday.

Now, shareholders will have to decide to take the money or back current
management, risking a drop in the share price toward $100. The average share price last year was about $93. One solution for investors
who want to keep exposure to the building materials industry would be to take Jacobs’ offer and use the proceeds to buy QXO. After
all, those who bet early on Jacobs’ ventures, which include United Rentals Inc. and a trash services company that eventually became
a part of Waste Management Inc., have been rewarded handsomely.

Jacobs is adamant on buying Beacon as his anchor to consolidate a fragmented
building materials market because it’s the No. 2 player in the roofing distribution business. The largest company, SRS Distribution
Inc., was snapped up by Home Depot Inc. last year in an $18 billion deal. Beacon also derives most of its sales from the repair and remodel
market, which helps mitigate weak new construction activity as interest rates remain stubbornly high.

Beacon is not a fixer-upper. The company posted record sales and adjusted
cash flow in the third quarter. It’s also been on its own acquisition spree, notching 19 small deals in the last two years, according
to Bloomberg data. In the last five years, the shares jumped 231%. That easily outpaced the 81% gain for the

S&P 500 Index over the same period. Last year, the stock lagged with
a 17% gain compared with 23% for the index.

“Beacon has a proven track record of delivering superior results
and shareholder value,” Randle said in Beacon’s statement.

Jacobs hinted in his letter that he wouldn’t budge much on his proposal,
which he called a “full and compelling price that is very close to the highest end of our value range.” He also threatened
the company with a proxy battle “to let your shareholders decide.”

Part of Jacobs’ pitch to shareholders is that he can steer the company
into high-growth categories that trade at higher multiples and that he will have the dry powder that Beacon doesn’t have “to
pursue transformational M&A,” according to the letter. Beacon usually holds its annual shareholders meeting in mid-May, but
we’re likely to see a deal before then.

Betting on Jacobs’ ability to build up companies through acquisitions
has been a good one in the past. It