Beacon Roofing Supply is telling Wall Street and its shareholders it’s staying under its own roof — at least for now.
Yesterday, QXO Inc. announced a proposal to acquire Beacon Roofing Supply in a cash transaction valued at approximately $11 billion. The offer of $124.25 per share represents a 37% premium over Beacon Roofing Supply’s 90-day unaffected volume-weighted average price of $91.02. It also aligns with QXO’s strategy to modernize the $800 billion building products distribution industry through digital commerce. QXO is a digital technology company based in Greenwich, Connecticut.
In response to QXO, Beacon is rejecting the offer.
“The company today confirmed that it has previously received and rejected an unsolicited, non-binding proposal from QXO, to acquire all outstanding shares of the company for $124.25 per share in cash,” Beacon says.
Beacon Roofing rejects acquisition offer from QXO
Beacon Roofing received QXO’s acquisition proposal Nov. 11, 2024.
“Consistent with its fiduciary duties, and in consultation with its independent financial and legal advisors, Beacon’s board of directors thoroughly evaluated the proposal,” Beacon Roofing says. “Following its review, the board unanimously rejected the proposal and determined that it significantly undervalues the company and its prospects for growth and future value creation.”
Beacon’s rejection of QXO’s offer underscores the roofing supply giant’s confidence in its own growth strategy and future value, according to the company.
“Beacon has delivered over 200% total shareholder returns in the past five years and is poised for further growth through its strategic plan, which will be elaborated on during the company’s investor day on March 13,” Beacon says.
While rejecting the offer, Beacon Roofing emphasized its willingness to engage in discussions with QXO under certain conditions. The company claimed it made repeated efforts to negotiate. That includes offering a non-disclosure agreement (NDA) to share confidential financial information and management projections. According to Beacon, QXO declined these offers, expressing no interest in accessing confidential information or engaging in further valuation discussions.
Beacon Roofing’s chair, Stuart Randle, criticized QXO’s approach.
“QXO has refused to improve its first and only proposal, which the Board determined significantly undervalues the Company,” he said.
Randle reiterated Beacon’s openness to exploring opportunities that maximize shareholder value but affirmed its commitment to acting in the best interests of the company and its investors.
Beacon Roofing’s president and CEO, Julian Francis, highlighted the company’s progress under its strategic framework, “Ambition 2025,” which focuses on above-market growth, operational excellence, and cultural development.
“These achievements have enabled us to create a differentiated business model with multiple paths to success, margin expansion, and value creation,” Francis said.
J.P. Morgan is acting as Beacon’s financial advisor, with Sidley Austin LLP and Simpson Thacher & Bartlett LLP providing legal counsel.
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