Beacon Roofing agrees to $11 billion QXO buyout, ending takeover battle

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(Reuters) -Beacon Roofing Supply has agreed to an $11 billion buyout offer from billionaire Brad Jacobs’ firm QXO, weeks after it rejected an earlier proposal and strived to avoid a hostile takeover attempt.

The deal caps a months-long takeover saga and gives QXO, a new entrant in the building products distribution industry, a head start, as it seeks to establish a strong presence in the sector.

QXO has agreed to pay $124.35 per share in cash for Beacon, the companies said on Thursday.

The new offer is only 10 cents higher than the previous bid of $124.25 per share, which it rejected in January, saying it “significantly undervalued” the company.

Beacon had also adopted a poison pill defense to prevent a hostile takeover.

QXO, which counts U.S. President Donald Trump’s son-in-law Jared Kushner as a board member, said in connection with the transaction, it has withdrawn its nomination of 10 independent director nominees for Beacon.

Shares of QXO were up 12% in premarket trading, while Beacon’s shares rose 2%.

“Acquiring Beacon is a key milestone in our plan to create substantial shareholder value and establish QXO as a leader in the $800 billion building products distribution industry,” said Brad Jacobs, chairman and chief executive officer of QXO.

QXO will be funding the deal with $5 billion in cash and financing commitments, covering the rest of the full purchase price, it said.

Earlier this week, QXO raised $830 million in private placement from institutional investors, contingent upon the deal with Beacon closing. It said it would sell about 67.5 million shares of its common stock at $12.30 per share.

QXO has already obtained anti-trust clearance in the United States and Canada to acquire Beacon.

The transaction is expected to close by the end of April.

(Reporting by Aishwarya Jain, Anshuman Tripathy and Devika Nair in Bengaluru; Editing by Rashmi Aich and Shinjini Ganguli)