TLDR
- QXO secures $1.2 billion investment from Apollo Global Management and partners including Franklin Templeton
- Convertible preferred stock priced at $23.25 per share, an 18% premium over Friday’s close
- Investment includes 4.75% annual dividend with mandatory acquisition deadline of July 15, 2026
- Stock climbed over 18% on Monday following the announcement
- Deal supports Brad Jacobs’ plan to build a $50 billion revenue company through acquisitions
Brad Jacobs Lands $1.2 Billion War Chest From Apollo for Acquisition Spree
Brad Jacobs just got the green light to go shopping. QXO announced Monday that Apollo Global Management is leading a $1.2 billion investment in the building products company. Shares rocketed more than 18% on the news.
The deal gives Jacobs fresh ammunition for his acquisition strategy. The serial entrepreneur founded QXO to dominate the building products distribution space. He’s aiming for $50 billion in annual sales within ten years.
Apollo isn’t handing over the cash without conditions. The investment group, which includes Franklin Templeton, structured the deal with a hard deadline built in.
QXO must deploy the $1.2 billion toward qualifying acquisitions by July 15, 2026. Miss that deadline and the deal falls apart. Investors cheered this requirement as it forces management to keep executing.
The money comes through convertible preferred shares. These shares carry a conversion price of $23.25 each. That price sits 18% above where QXO traded on Friday.
The Acquisition Clock Starts Now
Jacobs has roughly six months to find and close deals. The July deadline puts pressure on the company to move fast. But Jacobs has experience working under time constraints.
He co-founded United Rentals and successfully took several companies public during his career. His track record of building businesses through acquisitions attracted Apollo’s attention.
The preferred shares pay a 4.75% annual dividend. This gives Apollo and its partners steady income while they wait to see how QXO performs.
QXO already made one major move under Jacobs’ leadership. The company bought Beacon Roofing Supply for about $11 billion last April. That deal closed and set the template for future acquisitions.
The building products distribution industry represents an $800 billion market. Jacobs sees room for consolidation. He believes QXO can become the biggest public player in the space.
Wall Street likes what it sees so far. The stock hit $23.30 during Monday’s session. Volume exploded past normal levels as traders piled in.
Money Talks
The convertible structure benefits both sides. Apollo gets preferred shares with a fixed dividend. If QXO stock performs well, the group can convert those shares into common stock at the preset price.
This alignment of interests makes sense for long-term investors. Apollo wins if QXO executes its strategy successfully. The firm has been active in sectors ripe for consolidation.
Sources close to the deal confirmed the investment Monday morning. These people spoke on condition of anonymity due to private aspects of the transaction.
The 18% premium on the conversion price shows confidence in QXO’s future. Apollo wouldn’t agree to that price without believing the stock will climb higher.
QXO’s market value reached about $16 billion after the stock surge. The company operates from its Greenwich, Connecticut headquarters.
Jacobs now faces the challenge of finding the right acquisition targets. He needs deals that meet the investment group’s requirements. And he needs to close them before July 15, 2026.
The building products sector includes numerous regional distributors. Many family-owned businesses might consider selling to a well-funded buyer like QXO. Jacobs has the capital and the deadline to make things happen.
Trading remained active throughout Monday’s session. The stock settled around its highs as the market digested the Apollo news.
Franklin Templeton’s participation adds credibility to the deal. The firm joins Apollo in backing Jacobs’ vision for QXO. Multiple sophisticated investors betting on the same strategy sends a clear message.
The $1.2 billion investment ranks as one of the larger capital commitments in the building products space this year. Apollo continues deploying money into companies with strong acquisition strategies and experienced management teams.
