Can Brad Jacobs Repeat His M&A Playbook with QXO?

Introducing the Man Behind it all:

Brad Jacobs is an outspoken CEO with an attractive track record of building great companies that deliver high returns on equity. Jacobs has seen significant success as CEO of multiple companies, including United Waste (IPO 1992), which he consolidated and later sold to Waste Management in 1997 for $1.9 billion, delivering 55% compounded annual returns to investors. United Rental (URI), which served as a roll-up of heavy equipment rental companies, generated significant returns to equity investors (about 20,000%) during Jacobs' tenure as CEO from 1997 to 2007, and has continued to return much more thereafter. XPO, a freight company that Jacobs took public in 2012, gifted investors a 5000% return from 2012 to 2024. GXO, a spin-off from XPO, which occurred in 2021, as Jacobs claimed, “The two companies operating as separate entities unlock greater shareholder value.” However, returns have been sluggish since the initial spin-off from XPO. Lastly, like GXO, RXO (it is clear Jacobs likes Xs and Os) was also a spin-off from XPO, which, like GXO, has also suffered from subpar performance since its spin-off in 2021. Jacobs lives by his lifelong motto, “Create shareholder value,” and often admits that without this, he questions his very purpose. While humble and soft-spoken, when it comes to expectations, Jacobs has the highest. He is not afraid to vocalize and instate grand expectations as he enters a business that operates within a fragmented industry to begin his acquisitions and integrations. Jacobs has done just this for almost 40 years and has completed over 500 acquisitions during his tenure. His strategy is to identify a large, fragmented industry that has room for growth in the future, gather investors, purchase a business, and then utilize this business and the raised capital to continue acquiring and integrating other companies within the industry. Though the strategy is a bit more complex than this, Jacobs has also stated he will never overpay for an acquisition. This is a notable reason for his interest in a large, fragmented industry over a smaller one. A larger industry provides a multitude of acquisition targets; with this, Jacobs can make numerous bids at a lower multiple and work out the finer details of the acquisition as communications with the target business continue.

In Comes QXO:

Having proven his strategy across waste, rentals, and freight, Jacobs meticulously searched for what he calls his ‘last hoorah,’ ultimately landing on QXO, a company operating within the building products distribution industry, to pursue his tried-and-true strategy yet again. Jacobs was able to raise $5 billion in cash, with $900 million from himself, $100 million from family, and the remaining $4 billion from professional investors he has met throughout his time in business. The building products distribution industry, Jacobs says, has the size (over 30,000 companies between the U.S. and Europe, with $800 billion in annual sales), strong future growth (over 6-8% annually), and operational inefficiencies that Jacobs believes he can solve. In addition to consolidating the industry under QXO's umbrella through acquisitions, Jacobs plans to modernize the sector by applying AI to inventory, order processing, and logistics, areas he argues have long lagged. Jacob’s goal with QXO is to roll up the industry, integrating each acquisition in sequence while deploying AI to build more efficient operations, eventually leading to increased margins. In addition to this, as I have previously mentioned, Jacob’s is not afraid to instill bold expectations for his management. Publicly, Jacob has stated QXO will achieve $50 billion in recurring revenue within the next decade, which implies a roughly 1000% increase in revenues since it went public in January 2025. With just 10% net margins, this would translate to a similar rise in the bottom line as well. If investors did not expect significant returns based on Jacob’s track record, they do now.

The First Acquisition:

On April 29, 2025, QXO made its first acquisition in the pursuit of many. The company acquired Beacon Roofing Supply in an $11 billion buyout, measuring out to $124 per share in an all-cash deal. This price was based on a 10.8x multiple of Beacon's 2025 EBITDA and 10.1x its 2026 EBITDA, a slight premium to industry averages. Even at a premium, the deal positions QXO as a scale player overnight. Investors quickly approved, and QXO’s stock doubled within months of the deal. This strategic acquisition has quickly led QXO to become one of the largest distributors in the U.S. building products market. It has also granted QXO long-standing trust, as Beacon has been in business with a strong reputation since 1928. Not only this, but Beacon already holds key distribution centers near major cities and areas that are undergoing significant redevelopment, saving QXO both time and money. This acquisition accelerates Jacobs’ plan, giving QXO a scalable foundation to build on. Jacobs has stated that as soon as Beacon has been successfully integrated into day-to-day operations, maximizing the value of the two companies' synergies, QXO management will target its subsequent acquisition to combine and create even more shareholder value.

The Future?:

Unfortunately, we cannot see the future, and currently, investors lack any significant supplemental financial information to guide a thorough investment decision. Although QXO does not have a financial track record, having recently gone public in January 2025, it operates in a space that requires major renovations to create more efficient operations. With AI technology entering this space, the improvements can lead to a more efficient way to maintain the proper level of inventory, process orders, and coordinate shipping. Jacob’s goal is to become the Amazon of building product distribution. This venture would serve as a significant disruption to the industry, helping to expedite the building process, as construction jobs will deal with a swifter provider and are less likely to experience issues such as slowed shipping times, backorders, and other logistical complications. Though QXO lacks the financial history to guide investment decisions, looking back at Brad Jacobs' previous successes may provide investors with a strong indication of where QXO is heading. For investors, QXO represents both Jacobs’ proven playbook and his most ambitious bet yet. With no financials to lean on, the story hinges on one question: can Jacobs acquire his way to success one last time?

References

Forbes Magazine. (n.d.-a). Brad Jacobs. Forbes. https://www.forbes.com/profile/brad-jacobs/

Brumberg, R. (2025a, August 14). Qxo posts strong Q2 earnings. HBS Dealer. https://hbsdealer.com/qxo-posts-strong-q2-earnings

XPO completes spin-off of Rxo. XPO, Inc. (2022, November 1). https://investors.xpo.com/news-releases/news-release-details/xpo-completes-spin-rxo/

Brad Jacobs: Board member. XPO, Inc. (n.d.). https://investors.xpo.com/board-member/bradley-jacobs

Solomon, M. (2022, January 17). The XPO-GXO spinoff saga: `see you at the crossroads’. FreightWaves. https://www.freightwaves.com/news/the-xpo-gxo-spinoff-saga-see-you-at-the-crossroads

Gottlieb, B. (2025, July 16). Ten Minutes with Qxo CEO Brad Jacobs. Engineering NewsRecord RSS. https://www.enr.com/articles/61044-ten-minutes-with-qxo-ceo-brad-jacobs#:~:text=On%20the%20business%20side%2C%20I,t%20even%20see%20in%20themselves.

 Pérez, J. (2024, September 21). #76 the 4th Symphony of the Empire Builder. #76 The 4th Symphony of the Empire Builder. https://edelweisscapital.substack.com/p/the-4th-symphony-of-the-empire-builder

YouTube. (n.d.). No. 1 CEO: The Strategies I Used to Build 5 Billion-Dollar Companies (And How You Can Use Them). YouTube. https://www.youtube.com/watch?v=U-FlqVzbj0s&t=3282s

YouTube. (n.d.-a). How Brad Jacobs Will Invest $4.5 Billion to Reshape Building Supplies | Odd Lots. YouTube. https://www.youtube.com/watch?v=8kVjSB0MIwA

YouTube. (n.d.-a).  XPO Executive Chairman Brad Jacobs on building billion-dollar companies. YouTube. https://www.youtube.com/watch?v=nwMrwT6PZt4&t=647s

Inside QXO’s $11 billion play for Beacon Roofing—and why wall street’s watching closely. (n.d.-a). https://www.foxessellfaster.com/blog/inside-qxos-11-billion-play-for-beacon-roofingand-why-wall-streets-watching-closely/

Yahoo! (n.d.-b). Qxo proposes $11 billion acquisition of Beacon Roofing Supply; shares surge. Yahoo! Finance. https://finance.yahoo.com/news/qxo-proposes-11-billion-acquisition-155856044.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAI-5gnJ8Vtbn3G6ZKELfQh6DX-P2GP7gduLzXS-BBki5tmhaol4AKCrJOgj1tcZyR7FUATtY-e3BQeBD_Ci5wNcZAe2O65uISjc8W6u0d9wz2joHHGs6hECr32nJCS5RU8a92kqARMYZfDdHNeIBOIeQ9y0PckIkMmsjyUOrdIKS

Qxo, inc. - QXO completes acquisition of Beacon Roofing Supply. (n.d.-d). https://investors.qxo.com/news/news-details/2025/QXO-Completes-Acquisition-of-Beacon-Roofing-Supply/default.aspx