Even as new housing construction stalls, QXO announced plans to acquire Beacon Roofing Supply in a reverse triangular merger valued at $11 billion. QXO provides technology to manufacturing, distribution, and service sector clients while Beacon Roofing is a Fortune 500 company that distributes roofing and complementary building products, including siding and waterproofing. The all-cash deal is expected to close rapidly – as quickly as the end of this month.
Beacon “operates over 580 branches throughout all 50 states in the U.S. and 7 provinces in Canada,” according to the deal’s press release. “Beacon serves an extensive base of nearly 110,000 customers, utilizing its vast branch network and service capabilities to provide high-quality products and support throughout the entire project lifecycle.”
Source: National Association of Home Builders
According to the U.S. Department of Housing and Urban Development and the U.S. Census Bureau, housing starts started off the year with a 9.8% decline in January – with single-family starts falling by 8.4% and multifamily sector buildings decreasing by 13.5%. While there is strong demand for housing as many communities face affordability concerns, high mortgage rates and construction costs coupled with overall economic uncertainty have led many builders to curtail projects.
Following the Covid-19 pandemic, there was a boom in construction, as rock bottom interest rates and consumer focus on their home environments during lockdowns let Americans to build, despite souring construction prices. Lumber and other material prices spiked due to high demand coupled with supply chain disruptions that accompanied the global pandemic turmoil.
Source: National Association of Home Builders
As the Federal Reserve raised interest rates at a historic pace to fight inflation, it choked off construction and price increases moderated. However, construction material prices have begun rising again.
“Construction input prices increased at a rapid pace for the third consecutive month in March and have now risen at a 9.7% annualized rate through the first quarter of 2025,” according to ABC chief economist Anirban Basu. “The emerging effects of tariffs are glaring in the March data release.”
According to DealPulse’s M&A database, which harnesses both AI and attorneys to digest the granular deal points of publicly-announced transactions, Beacon Roofing is advised by law firms
Simpson Thacher & Bartlett LLP, and Sidley Austin. QXO, Inc. is advised by Paul, Weiss, Rifkind, Wharton & Garrison LLP.
