QXO Agrees to Buy Kodiak for $2.25B in Bid to Broaden Its Building-supply Reach

QXO is purchasing Kodiak Building Partners for roughly $2.25 billion, a move designed to extend the distributor’s product mix and footprint beyond its core roofing and waterproofing lines. The package combines about $2.0 billion in cash with an equity component of 13.2 million QXO shares and a buyback option at $40 per share, reflecting a structured financing approach. Kodiak brings approximately $2.4 billion in annual revenue and capabilities in lumber, trusses, gypsum and on-site fabrication that QXO lacks today, creating complementary sales channels and supplier overlap. Executives expect substantial supplier and purchasing synergies because many of Kodiak’s top vendors already transact with QXO, enabling larger-scale procurement and broader product offers to shared customers. The deal values Kodiak at about 10.7 times projected 2025 EBITDA and roughly 0.95 times sales, metrics that guided price and will shape integration and ROI expectations. This acquisition follows QXO’s earlier major purchase and arrives after an unsuccessful attempt last year to acquire a drywall and ceilings distributor, intensifying scrutiny of Jacobs’s consolidation playbook. QXO has bolstered its war chest through recent convertible preferred financing, giving it both cash and borrowing headroom to pursue more deals in the near term. Competitors including Home Depot and Lowe’s have been active consolidators, and QXO’s move narrows product gaps that previously limited its appeal to large builders and contractor networks. Macroeconomic headwinds—chiefly elevated mortgage rates—continue to suppress new-home starts and big renovation projects, but QXO is betting on a later recovery to convert expanded distribution capacity into sales growth. Management also plans to deploy advanced forecasting and inventory tools, including AI-driven demand planning, to tighten working capital and lift margins post-acquisition. The structure of the consideration and the recent financing package suggest QXO intends to keep flexibility for further transactions, whether public or private targets. Integration risks remain: aligning different product lines, onboarding fabrication services and extracting promised procurement benefits will determine whether the purchase delivers the targeted scale advantages.