Building-products distributor QXO has agreed to acquire privately held Kodiak Building Partners for about $2.25 billion, according to two people with direct knowledge of the matter, who spoke to Reuters.
The transaction marks QXO’s second major deal after its $11 billion purchase of Beacon Roofing Supply last year and signals a renewed push by Jacobs to build a national heavyweight capable of competing with industry titans Home Depot and Lowe’s.
The deal comes months after Jacobs’ failed attempt to acquire GMS, a drywall and ceilings distributor that ultimately agreed to be bought by Atlanta-based Home Depot. That setback slowed QXO’s expansion ambitions and sharpened scrutiny around its ability to scale quickly in a consolidating market. Kodiak now offers Jacobs both a rebound opportunity and a strategic pivot beyond roofing.
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QXO, which distributes roofing and waterproofing materials, currently generates roughly $5 billion in annual revenue and carries a market capitalization exceeding $16 billion. By contrast, Home Depot and Lowe’s are valued at approximately $388 billion and $160 billion, respectively, underscoring the scale disparity Jacobs is attempting to close.
Kodiak brings $2.4 billion in annual revenue, 110 locations across 26 states, and a workforce of about 5,500 employees. While QXO has historically concentrated on roofing and related categories, Kodiak distributes lumber, trusses, gypsum, and other core construction materials essential to large homebuilders and regional contractors. It also provides in-house fabrication and installation services, giving QXO exposure to higher-margin value-added operations.
The acquisition, therefore, does more than increase revenue; it diversifies product mix and deepens QXO’s presence in structural building materials, positioning it more squarely within the mainstream construction supply chain.
Purchasing Power and Supplier Leverage
One of the most immediate strategic advantages lies in procurement scale. Sixteen of Kodiak’s top 20 vendors already supply QXO. That overlap provides an opportunity to consolidate purchasing volumes, negotiate better pricing, and streamline logistics across a broader platform.
In an industry where margins are often tight and inventory management is critical, scale directly translates into leverage. Larger distributors can negotiate improved payment terms, volume rebates, and preferential supply allocations—advantages that become especially important during periods of constrained materials availability.
By integrating Kodiak’s supplier base, QXO could expand its cross-selling opportunities, offering customers a wider array of products while deepening vendor relationships. The shared supplier footprint also reduces integration friction compared to a more dissimilar acquisition.
Financial Structure and Valuation
Under the terms of the agreement, QXO will pay approximately $2 billion in cash and issue 13.2 million shares to Kodiak’s owners. QXO retains an option to repurchase those shares at $40 apiece, according to one of the sources.
The implied enterprise value equates to roughly 10.7 times Kodiak’s projected 2025 earnings before interest, taxes, depreciation, and amortization, and about 0.95 times sales. For a distribution business operating in a cyclical sector, that multiple sits within the range seen in recent building products transactions, particularly where scale and geographic footprint are attractive.
QXO has bolstered its financial capacity ahead of further deals. The company recently secured a $3 billion convertible preferred financing led by Apollo and Temasek, providing fresh capital and borrowing flexibility. That war chest, combined with the Kodiak purchase, suggests additional acquisitions may follow in the coming months, potentially involving both private and public targets.
A Consolidating Industry
The deal comes when high U.S. mortgage rates have weighed on new home construction and large renovation projects. Builders face slower starts, and homeowners have been more cautious about major remodeling expenditures. Yet distributors are positioning for a cyclical rebound, with expectations that interest rates could ease.
Industry consolidation has accelerated over the past two years. Home Depot acquired SRS Distribution for about $18.25 billion in 2024 and later agreed to acquire GMS through SRS. Lowe’s countered with an $8.8 billion purchase of Foundation Building Materials and earlier bought Artisan Design Group.
These transactions signal that large retailers are pushing aggressively into professional contractor distribution channels. Jacobs’ strategy appears to be building a focused distribution platform that can operate with the speed and specialization of a pure-play wholesaler, rather than a big-box retail hybrid.
Technology as a Differentiator
Jacobs has repeatedly emphasized the use of artificial intelligence to forecast demand and optimize inventory management. In distribution, where margins can hinge on inventory turnover and working capital efficiency, predictive analytics can reduce stockouts, cut excess inventory, and improve service levels.
If effectively implemented, AI-driven demand planning could differentiate QXO from more traditional operators. The scale gained through acquisitions like Kodiak increases the dataset available for forecasting, potentially strengthening model accuracy.
However, execution risk remains significant. Integrating multiple acquisitions while layering in new technology platforms can strain operational systems and management bandwidth. Investors will likely watch closely to see whether promised efficiencies materialize.
The Kodiak acquisition serves multiple purposes for Jacobs. It restores acquisition momentum after the GMS setback. It broadens QXO’s product categories into structural materials central to homebuilding. It increases purchasing leverage. And it demonstrates to investors that QXO remains committed to its ambitious goal of expanding revenue toward $50 billion over time.
Yet the competitive gap with Home Depot and Lowe’s remains vast. Those companies benefit from entrenched supplier relationships, vast distribution networks, and diversified revenue streams. QXO’s path to parity will depend on sustained dealmaking, disciplined integration, and capital market support.
This deal is a clear indicator that the consolidation race in building products distribution is intensifying. With private equity capital flowing into the sector and large retailers pushing deeper into professional channels, mid-sized distributors may increasingly find themselves acquisition targets.