QXO, Inc. Announces Proposed $2 Billion Senior Secured Notes Offering by Subsidiary Queen MergerCo, Inc., in Connection with Acquisition of Beacon Roofing Supply, Inc.
New York, NY – April 23, 2025 – QXO, Inc. (NYSE: QXO) (“QXO” or the “Company”) announced today that its wholly owned subsidiary, Queen MergerCo, Inc. (“Merger Sub”), intends to offer, subject to market and other customary conditions, $2 billion in aggregate principal amount of Senior Secured Notes due 2032 (the “Notes”). This offering represents a significant milestone in QXO’s financing strategy to support its previously disclosed acquisition of Beacon Roofing Supply, Inc. (“Beacon”).
The proposed offering is expected to be conducted in a private placement, pursuant to exemptions from registration under the U.S. Securities Act of 1933, as amended (the “Securities Act”). The Notes will be offered only to persons reasonably believed to be qualified institutional buyers under Rule 144A of the Securities Act and to certain non-U.S. persons in offshore transactions under Regulation S. The Notes and the related guarantees will not be registered under the Securities Act or any other applicable securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.
Purpose of the Offering and Use of Proceeds
The net proceeds from the offering, combined with additional sources of financing including anticipated borrowings under new senior secured credit facilities, proceeds from QXO’s previously announced equity capital raise, and available cash on hand, will be used to finance the transactions contemplated by the Agreement and Plan of Merger (the “Merger Agreement”) dated March 20, 2025, between QXO, Merger Sub, and Beacon. These proceeds will be allocated toward the purchase price for Beacon, as well as transaction-related costs, fees, and other associated expenses.
This integrated financing structure reflects QXO’s commitment to maintaining a disciplined capital allocation framework while strategically deploying capital to support long-term growth through transformative M&A activity. The financing is structured to provide a balanced capital stack that supports both the immediate execution of the acquisition and the Company’s long-term financial flexibility.
Structure of the Acquisition and Post-Closing Ownership
Under the terms of the Merger Agreement, Queen MergerCo, Inc., a special-purpose acquisition vehicle formed by QXO specifically for this transaction, will merge with and into Beacon upon the closing of the acquisition. Beacon will survive the merger and continue its operations as a wholly owned subsidiary of QXO. The combined company is expected to benefit from enhanced scale, improved supply chain capabilities, and expanded geographic reach within the building materials distribution industry.
The merger is expected to close in mid-2025, subject to the satisfaction of customary closing conditions, including regulatory approvals and the successful completion of the financing transactions, including the Notes offering and associated credit facilities.
Note Terms, Guarantees, and Collateral Package
The Notes will be senior secured obligations of Merger Sub and will be guaranteed on a senior secured basis by each of Beacon’s wholly owned domestic restricted subsidiaries that also guarantee Beacon’s new senior secured term loan facility. Upon completion of the merger, the obligations under the Notes will effectively become obligations of Beacon as the surviving entity, and Beacon’s subsidiaries will continue to serve as guarantors.
The Notes and the related guarantees will be secured by a comprehensive collateral package designed to offer investors significant asset-backed protection. Specifically, the security interest will include:
- First-priority liens on substantially all material owned tangible and intangible assets of Beacon and the subsidiary guarantors, excluding certain defined categories of assets.
- Second-priority liens on assets classified as “ABL Priority Collateral,” which includes inventory, accounts receivable, and related assets.
The collateral package will be subject to certain customary exceptions and permitted liens. This two-tiered lien structure is intended to optimize recoveries in a downside scenario while maintaining flexibility for Beacon to operate its business and manage its working capital effectively.
Strategic Rationale and Synergies
The acquisition of Beacon Roofing Supply by QXO is aligned with QXO’s broader strategy of building a market-leading platform in the building materials sector. Beacon, as one of the largest publicly traded distributors of residential and commercial roofing materials and complementary building products, brings substantial operational expertise, a national footprint, and deep customer relationships.
Through this transaction, QXO anticipates capturing meaningful operational synergies and revenue growth opportunities, including:
- Leveraging enhanced procurement capabilities to improve margin performance;
- Expanding product offerings across both companies’ distribution networks;
- Driving supply chain efficiencies through shared logistics and warehousing assets;
- Utilizing technology and data analytics to enhance sales effectiveness and customer service.
Following the transaction, the combined entity will be well-positioned to capitalize on strong demand trends in the residential and commercial construction markets across North America. Management expects that the acquisition will be accretive to earnings and cash flow in the first full year following the closing.
Important Notices and Disclaimers
This press release is issued pursuant to Rule 135c under the Securities Act and is for informational purposes only. It does not constitute an offer to sell or the solicitation of an offer to buy the Notes or any other securities of QXO, Merger Sub, or Beacon. No securities referenced in this release may be sold in any jurisdiction in which such an offer, solicitation, or sale would be unlawful prior to registration or qualification under applicable securities laws.
Investors are cautioned that forward-looking statements in this release, including those regarding the anticipated use of proceeds, timing of the offering, and expected completion of the Beacon acquisition, are subject to risks and uncertainties. These statements are based on current expectations and assumptions and are not guarantees of future performance. Actual results may differ materially due to a variety of factors, including market conditions, regulatory developments, and the completion of financing arrangements.
QXO will provide further updates as appropriate in accordance with its ongoing disclosure obligations.
About QXO
QXO plans to become the leader in the $800 billion building products distribution industry, with the goal of generating outsized value for shareholders. The company is targeting annual revenue of $50 billion in the coming decade through accretive acquisitions and organic growth. QXO recently signed a definitive agreement to acquire Beacon Roofing Supply, Inc. for approximately $11 billion, making QXO the second-largest distributor of roofing products in the United States upon closing, expected the week of April 28, 2025. In addition, QXO provides technology solutions to clients in the manufacturing, distribution and service sectors.