QXO, the building-products distributor run by investor and dealmaker Brad Jacobs, has agreed to acquire Kodiak Building Partners for roughly $2.25 billion, two people with direct knowledge of the transaction said. The purchase price combines cash and equity and will broaden QXO’s product offering beyond roofing and waterproofing to include lumber, trusses, gypsum and other construction supplies that are important to homebuilders and regional contractors.
Under the terms described by one of the people, QXO will pay $2 billion in cash and issue 13.2 million QXO shares to Kodiak’s owners, while preserving an option to repurchase those shares at $40 each. The sources, who spoke on condition of anonymity because the deal details are private, said QXO is valuing the target at an enterprise multiple of about 10.7 times projected 2025 EBITDA and roughly 0.95 times sales.
Kodiak, according to its website, generates about $2.4 billion of annual revenue, operates 110 locations across 26 states and employs about 5,500 people. The company also offers in-house fabrication and installation services. Kodiak declined to comment on the agreement; Jacobs did not immediately respond to a request for comment.
The acquisition follows QXO’s $11 billion takeover of Beacon Roofing Supply last year and is part of a push by Jacobs to scale the business. QXO’s stated annual revenue base before the Kodiak deal was roughly $5 billion and the company has a market capitalization of more than $16 billion. QXO competes in wholesale building materials distribution with much larger retail rivals, including Home Depot and Lowe’s, which the people said are valued at about $388 billion and $160 billion respectively.
Those who spoke about the transaction said the two distributors share significant supplier overlap. Sixteen of Kodiak’s top 20 vendors are already QXO suppliers, a dynamic that QXO expects will allow it to expand purchasing scale and to offer a broader product mix to existing customers. The move brings QXO further into categories that are central to large homebuilders and regional contractors, beyond its established activity in roofing and waterproofing.
Jacobs has previously indicated plans to apply artificial intelligence within QXO to improve demand forecasting and inventory management, with the goal of reducing costs and boosting margins. The sources said that capability is part of the strategic rationale for the Kodiak purchase, as better forecasting could improve utilization of the combined supplier base and inventory footprint.
The Kodiak deal is not expected to be the last. One of the people said additional transactions could follow in coming months, potentially involving either private or public companies, though they did not provide further detail. Jacobs’ earlier acquisition activity included a high-profile but unsuccessful bid last June for drywall and ceilings distributor GMS, a contest that Home Depot ultimately won. That loss slowed Jacobs’ ambitions to grow QXO from roughly $5 billion in annual revenue toward a $50 billion target and intensified scrutiny of his next moves. Earlier takeover efforts were supported by investors that included Affinity Partners and Sequoia Heritage, according to prior disclosures.
The transaction comes against a backdrop of high U.S. mortgage rates that have weighed on new home construction and on large repair and renovation projects. Despite that headwind, industry participants and distributors are positioning for a recovery in activity should interest rates decline.
QXO has recently expanded its available capital and borrowing capacity to support acquisitions. The company secured a $3 billion convertible preferred financing led by Apollo and Temasek, according to the people familiar with the company’s financing, which provides additional resources to pursue deals.
Consolidation in building-products distribution has accelerated over the past two years. Home Depot completed an approximately $18.25 billion acquisition of SRS Distribution in 2024 and later agreed to acquire GMS through SRS. Lowe’s responded with acquisitions of its own, including an $8.8 billion purchase of Foundation Building Materials and an earlier purchase of Artisan Design Group.
Context and implications
- Strategically, the Kodiak purchase expands QXO’s addressable product categories and adds fabrication and installation capabilities, potentially strengthening relationships with large homebuilders and contractors.
- The supplier overlap between QXO and Kodiak can enable greater purchasing scale and a broader SKU offering to shared customers.
- QXO’s access to fresh financing increases its capacity to pursue further deals as consolidation continues in the sector.
Deal specifics
- Consideration: $2 billion cash plus 13.2 million QXO shares, with a share repurchase option at $40 per share.
- Kodiak metrics: about $2.4 billion in revenue, 110 locations across 26 states, and roughly 5,500 employees.
- Valuation metrics cited: about 10.7 times projected 2025 EBITDA and about 0.95 times sales on an enterprise value basis.
People with direct knowledge of the matter provided the details and requested anonymity because the negotiations were private. Kodiak declined to comment; Jacobs did not immediately reply to a request for comment.