QXO, a distributor of roofing products and building materials, generated acquisition buzz last month, as its senior business leaders announced a combined $3 billion in funding for its war chest.
On Wednesday, the Brad Jacobs-backed company announced plans to put its war chest to work by acquiring Kodiak Building Partners from private equity firm Court Square Capital Partners for $2.25 billion.
Jacobs has set an ambitious goal to increase QXO’s annual revenue from about $10 billion to $50 billion within about five years as it accelerates consolidation in the highly fragmented $800 billion building products industry. The deal to acquire Kodiak Building Partners – a top-five-ranked player in its category – is a bold step in that direction.
The deal is expected to close early in the second quarter, according to a source familiar with the deal. The purchase price is $2 billion in cash plus 13.2 million QXO shares, and QXO will retain the right to repurchase those shares at $40.
The source also noted that QXO “has the capacity for more deals.” After QXO’s capital raises in January, Morgan Stanley analyst Christopher Snyder estimated that the company had amassed a $10 billion war chest.
“Our acquisition pipeline remains very active, with plenty of dry powder from our recently announced equity financings led by Apollo and Temasek,” Chairman and CEO Brad Jacobs said in a press release.
Why QXO chose Kodiak Building Partners
Kodiak Building Partners is a national distributor of construction materials such as lumber, engineered wood, doors, windows, trusses and gypsum products. According to a QXO spokesperson, Kodiak Building Partners has $2.4 billion in annual revenue. The acquisition triples QXO’s market opportunity to over $200 billion and opens up new inroads for QXO in almost every major building products category.
“The acquisition moves QXO into lumber, trusses, gypsum and construction supplies, with complementary fabrication, assembly, and installation capabilities, creating a more complete offering in exterior products and strategic entry points into interior categories and services,” the spokesperson said.
The spokesperson added that Kodiak “operates in highly fragmented segments that offer substantial consolidation runway aligned with our long-term path toward a $50 billion revenue company.”
QXO believes that it is buying Kodiak Building Partners at the bottom of the housing cycle, and that the deal came at a favorable price, the spokesperson added.
The Kodiak deal will also create cross-selling opportunities with QXO’s homebuilding and general contracting clients, as 16 of Kodiak’s top 20 vendors are shared with Beacon Roofing Supply. QXO acquired Beacon for $11 billion in an all-cash deal that closed in April 2025.
“QXO is the most exciting company in the industry,” Steve Swinney, Co-Founder and Chief Executive Officer of Kodiak Building Partners, said in a provided statement. “By joining forces, we’re moving from strength to strength to unlock new opportunities for our customers and employees.”
Other potential acquisition targets
The Builder’s Daily reported in January that QXO was exploring its options and in late-stage discussions with seven potential acquisition targets. Several of the targets are private, and some are family-owned businesses in both the US and Europe.
The targets represent both mid-sized deals of between $1 billion and $5 billion in annual revenue, as well as larger deals involving companies with more than $5 billion in revenue.
The following are a few other companies that QXO could be in talks with:
Boise Cascade (BCC)
Etalon Capital listed Boise Cascade as a potential acquisition opportunity last year, and William Blair analyst Ryan Merkel believes that QXO is likely targeting lumberyard networks given the favorable deals available in that space. Boise Cascade, an Idaho-based manufacturer of wood products, siding, decking, doors, insulation, and roofing, aligns with that analysis.
Boise Cascade is a growing company that acquired Humphrey Company, Inc. in November, and is estimated to have had an annual revenue of about $5.39 billion to $6.59 billion in fiscal year 2025.
BlueLinx Holdings (BXC)
Etalon Capital also noted BlueLinx Holdings as a potential acquisition target. The company, with revenues of about $3 billion in 2025, sells lumber, panels, millwork, siding and industrial materials, enabling potential cross-selling opportunities.
US LBM
US LBM had total sales of $7.8 billion in 2024. The private company sells doors, windows, wallboard, millwork, roofing, siding, decking, lumber, cabinetry and other building materials. A source with knowledge of the building materials space previously told The Builder’s Daily that many industry players see US LBM as a suitable acquisition target, assuming that owner Bain Capital is willing to part ways with the firm.
Brad Jacobs plans to grow QXO to $50 billion in annual revenue through a mix of acquisitions and organic growth. Kodiak Building Partners will be the company’s second acqusition.
Jacobs has a proven growth model that made him billions in industries such as equipment rentals and logistics. He is betting that this playbook, which involves acquiring companies and growing their revenues through increased efficiencies, will also be successful in the building materials industry.
Once QXO acquires a company, the goal is to double its revenues within three to five years. Under the leadership of a chief artificial intelligence officer, QXO is executing a tech-driven approach focused on purchasing conventional distributors and consolidating them onto a single AI-enabled digital platform. The goal of this strategy is to boost operational efficiencies and margins.
The QXO spokesperson said that the company identified six “controllable levers” in Kodiak Building Partners that offer a realistic path to doubling revenues over the next several years. Those opportunities for increased efficiencies are through cross-selling, scaled procurement, improved technology, network optimization, organizational redesign and manufacturing efficiency.
QXO’s latest acquisition signals that the fragmented building materials industry could become more consolidated, mirroring comparable M&A activity within homebuilding. The recently released Webb Analytics 2025 Deals Report found that 2025 was the busiest year for M&A activity in the building materials industry over the past decade, when accounting for the number of facilities acquired.
However, the total number of deals fell by 30% last year, and last year had the lowest number of companies making acquisitions since 2020. Megadeals dominated in 2025, as four of 120 deals accounted for 85% of the acquired supply facilities, according to Craig Webb, President of Webb Analytics. QXO’s Beacon Roofing Supply was one of these megadeals.
This suggests that the larger industry players like Lowe’s, The Home Depot and QXO could increasingly dominate the M&A landscape in the years ahead.
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