TLDR
- An Apollo Global Management-led investment group is investing $1.2 billion in QXO through convertible preferred shares
- The preferred shares have an initial conversion price of $23.25 per share, representing an 18% premium to Friday’s closing price
- The investment carries a 4.75% annual dividend and must be used to fund qualifying acquisitions by July 15, 2026
- Franklin Templeton is among other firms participating in the investment group
- QXO stock surged over 18% following the announcement
QXO stock jumped more than 18% on Monday after the company announced a major cash injection from an investment group led by Apollo Global Management. The deal brings $1.2 billion in fresh capital to fuel the building products distributor’s expansion plans.
The Greenwich, Connecticut-based company will issue convertible preferred shares to the Apollo-led group. Franklin Templeton is among other firms participating in the investment.
The preferred shares come with an initial conversion price of $23.25 per share. That’s 18% higher than where QXO closed on Friday. The shares will also pay a 4.75% annual dividend.
But there’s a catch that investors seem to love. The money comes with strings attached.
Deadline Drives Action
QXO must use the $1.2 billion to fund qualifying acquisitions by July 15, 2026. No acquisitions by that date means no deal. This requirement pushes founder Brad Jacobs to keep moving on his expansion strategy.
Jacobs founded QXO with plans to build the largest publicly traded building products distributor in North America. The serial entrepreneur previously co-founded United Rentals and has taken multiple companies public.
He’s targeting the $800 billion building products distribution industry. His goal is to hit $50 billion in annual revenues within the next decade. Acquisitions are the main path to get there.
First Big Deal Done
QXO already completed one major purchase under Jacobs’ watch. The company closed an $11 billion deal for Beacon Roofing Supply last April. That acquisition marked the first step in the company’s growth strategy.
Now QXO has more firepower for additional deals. The Apollo investment gives the company the capital needed to pursue more targets in the fragmented building products market.
The July deadline creates urgency. Jacobs and his team have about six months to identify and close qualifying acquisitions.
Wall Street responded positively to both the investment and the deadline requirement. The stock traded at its morning high of around 20% up before settling slightly lower by midday Monday.
The Apollo-led investment demonstrates confidence in QXO’s acquisition strategy. Apollo Global Management continues to deploy capital into sectors with consolidation opportunities. The firm sees potential in companies pursuing growth through acquisitions.
Sources familiar with the matter confirmed the deal details on Monday. The persons requested anonymity because some aspects of the transaction remained private.
The convertible preferred shares give Apollo and its partners the option to convert their investment into common stock at the preset price. This structure aligns the investors’ interests with QXO’s long-term performance.
QXO stock hit $23.30 per share during Monday’s trading session. Trading volume spiked well above the typical daily average as news of the Apollo investment spread.
The company’s market cap reached approximately $16 billion following the stock price surge. The July 15, 2026 deadline for qualifying acquisitions now looms as the next key date for QXO investors to watch.
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