Apollo-Led Group to Inject $1.2 Billion into Brad Jacobs' QXO for Building Products Roll-up
Apollo Global Management and other investors commit $1.2 billion to QXO. The deal supports Brad Jacobs' plan to consolidate the building products industry.
Brad Jacobs is making another massive bet on a fragmented industry. According to Reuters, an investor group led by Apollo Global Management has committed to investing $1.2 billion in QXO, a company focused on the building products distribution sector. This capital injection provides the necessary dry powder for QXO to execute its aggressive acquisition strategy.
Apollo QXO $1.2 billion investment and the Roll-up Strategy
The investment consists of a private placement of common stock. QXO intends to use these funds to consolidate the $800 billion building products distribution market. By acquiring smaller, localized players and integrating them into a tech-enabled national platform, QXO aims to achieve significant scale and operational efficiency.
The Jacobs Playbook: From XPO to QXO
Brad Jacobs, QXO's executive chairman, has a proven track record of creating value through consolidation. His previous ventures, including United Rentals and XPO, utilized similar M&A strategies to dominate their respective sectors. Apollo's partner, Antoine Munfakh, noted that they're excited to partner with Jacobs again, citing his ability to scale businesses rapidly.
Investors should monitor the residential and commercial construction cycles. A prolonged downturn in the housing market could slow down QXO's growth trajectory and impact the valuation of acquired assets.
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