Brad Jacob’s QXO Offers $5 billion to GMS, Warns of Hostile Takeover
Synopsis
Billionaire Brad Jacobs is back in the headlines with another bold move. His new company, QXO, has made a $5 billion cash offer to buy building material supplier GMS. But if GMS’s board doesn't…
Billionaire Brad Jacobs is back in the headlines with another bold move. His new company, QXO, has made a $5 billion cash offer to buy building material supplier GMS. But if GMS’s board doesn't respond positively by June 24, Jacob says he’ll take the offer straight to shareholders through the company's management system.
In a letter to GMS CEO John Turner, Jacobs made it clear that if they choose not to engage, then Brad is prepared to take the offer directly to GMS shareholders, whom they're confident about will find the offer attractive.
This is Jacob's second hostile takeover attempt this year. In March, he successfully acquired Beacon Roofing Supply for an $11 billion deal after months. Now he is looking towards GMS to expand XQO’s reach into construction materials, which are specifically for inside the home products.
A Push to Build a $50 Billion Business
Jacobs is known for creating large companies in different industries, and now he has set a goal to turn XQ into a $50 billion revenue business over the next 10 years. GMS could play a huge part in this plan. It has more than 300 distribution centres supplying materials commonly used in Home construction across the US and Canada.
QXO’s offer values GMS shares at $95.20, which is about 17% more than what they closed recently. Jacob said he first approached GMS leadership last June, and the talks continued till May 22 this year, but after GMS stock skyrocketed because of rumours of a buyout, Jacob decided to go public with the offer
Competition and Market Speculation
The Wall Street Journal reported that Home Depot has also made an offer to GMS. And neither GMS nor Home Depot has committed to the claim. Meanwhile, Jacob accused investment banks, JP Morgan, and Jefferies of trying to find other buyers behind his scenes.
Despite saying that GMS is poorly managed, Jacobs thinks his leadership could deliver more value to its shareholders. GMS says it has received the offer, and its board will review it.
QXO was once a very small software company that was completely changed by Jacob’s since 2023, after he invested $1 billion. With financial advisors from Morgan Stanley by his side, Jacobs is showing once again that he’s ready to fight for what he wants.
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At Inspirepreneurs Magazine, covering entrepreneurship, business failures, and the human stories behind the world's most ambitious founders. She writes at the intersection of strategy and storytelling.
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