HERNDON, Va. - Beacon (NASDAQ:BECN), a Fortune 500 distributor of specialty building products, has rejected an unsolicited acquisition proposal from QXO, Inc. (NASDAQ:QXO). The offer, dated November 11, 2024, to purchase all outstanding shares of Beacon for $124.25 per share in cash, was unanimously deemed insufficient by Beacon's Board of Directors. According to InvestingPro data, QXO maintains a strong balance sheet with more cash than debt and a current ratio of 258.64, suggesting ample financial flexibility for potential acquisitions.
The Board, after thorough consultation with independent financial and legal advisors, concluded that the proposal significantly undervalues Beacon's growth prospects and future value creation potential. Beacon's Chair of the Board, Stuart Randle, stated that the offer fails to reflect the company's strategic plan and its potential for growth, emphasizing that Beacon has produced a total shareholder return of over 200% in the past five years. This contrasts sharply with QXO's market performance, which InvestingPro data shows has declined by nearly 85% over the past year, with particularly volatile stock movements.
Beacon has attempted to engage with QXO to discuss valuation, subject to a standard non-disclosure agreement (NDA), which QXO declined. The company also offered to limit confidentiality obligations and structured the NDA to allow QXO to participate in a proxy contest at the upcoming 2025 annual meeting of shareholders.
Julian Francis, President and CEO of Beacon, expressed confidence in the company's growth trajectory and the execution of its Ambition 2025 strategy, which aims for above-market growth and operational excellence. While QXO shows promising revenue growth potential with InvestingPro forecasting 92.7% growth for the current year, analysts don't expect profitability in the near term. Beacon anticipates revealing more about its long-term financial targets at an Investor Day scheduled for March 13, 2025. Get deeper insights into both companies' valuations and growth metrics with an InvestingPro subscription, which offers exclusive financial health scores and detailed analysis.
J.P. Morgan is serving as Beacon's financial advisor, with Sidley Austin LLP and Simpson Thacher and Bartlett LLP as legal advisors. Beacon, established in 1928, operates over 580 branches across the U.S. and Canada and is known for its private label brand TRI-BUILT® and the digital account management suite Beacon PRO+®.
The company advises shareholders that no action is needed at this time and plans to file relevant documents with the U.S. Securities and Exchange Commission (SEC) for the upcoming annual meeting.
This news is based on a press release statement from Beacon.
In other recent news, QXO, Inc. has been busy with noteworthy developments. The company's stockholders approved a key executive compensation plan at the 2024 Annual Meeting, electing all the company's nominees for director and ratifying the appointment of Marcum LLP as the independent registered public accounting firm for fiscal year 2024. In parallel, QXO has been actively seeking growth through acquisitions, as indicated by its proposal to acquire Beacon Roofing Supply (NASDAQ:BECN), following a declined offer to take over Rexel (EPA:RXL), a French electrical products distributor.
Additionally, QXO has announced the appointment of Ashwin Rao as the new chief artificial intelligence officer. Rao, with over three decades of experience in enterprise AI, is expected to lead QXO's tech initiatives, including demand forecasting, inventory management, and e-commerce. This move aligns with QXO's strategy to become a leading tech-forward entity in the building products distribution sector.
Goldman Sachs reiterated its Buy rating on QXO, further signaling confidence in the company's growth prospects. However, it's important to note that these plans involve inherent risks and uncertainties, and are not guarantees of future performance. These recent developments reflect QXO's current plans and expectations, highlighting a period of strategic moves and appointments.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.