QXO today announced an additional funding round to support its next acquisition(s), as the firm aims to disrupt and consolidate the highly fragmented $800 billion building products industry.
The company’s $1.2 billion investment made public last week now totals $3 billion, with an additional $1.8 billion in funding from Apollo, Temasek, and other investors announced on Monday. Under the terms of the deal, QXO must complete or announce an acquisition by July 15.
QXO, a distributor of roofing products and building materials that billionaire Brad Jacobs founded in 2023, has an ambitious goal of increasing its annual revenue from about $10 billion to $50 billion within about five years.
A source familiar with the QXO deal tells The Builder’s Daily that the company is in late-stage discussions with seven potential acquisition targets, and that there is a high likelihood of an acquisition announcement within weeks or months. Several of the targets are private, and some family-owned businesses in both the US and Europe, the source said.
QXO is considering both mid-sized deals consisting of companies between $1 billion and $5 billion in revenue, along with more “transformational” deals involving companies with greater than $5 billion in revenue.
William Blair analyst Ryan Merkel estimated last week that QXO had amassed a $7 billion to $8 billion war chest. Based on that estimate, the company could now have roughly $9 billion to $10 billion available for additional acquisitions, following the latest funding announcement.
Potential acquisition targets
QXO hasn’t revealed the name of any potential targets, but there is speculation that the company will use acquisitions to gradually develop large product category verticals.
Merkel, for example, believes the next acquisition is likely to be a lumberyard network, given favorable deals in that space. The price of lumber is also down roughly 66% from its peak in May 2021 and has declined since August despite tariff concerns. However, analysts remain split on what vertical QXO is likely to expand into next.
While not an exhaustive list, the following are a few companies that QXO could potentially be targeting:
Boise Cascade (BCC)
The Idaho-based manufacturer of wood products, siding, decking, doors, insulation, and roofing is projected to have annual revenue of about $5.39 billion to $6.59 billion in fiscal year 2025. The company is also growing, having acquired Humphrey Company, Inc., which sells siding, roofing, and decking to lumber dealers and contractors in the Northeast, in November.
Etalon Capital listed Boise Cascade as a potential acquisition opportunity last year, and the company also aligns with Merkel’s analysis that a lumberyard is QXO’s most likely target.
BlueLinx Holdings (BXC)
Etalon Capital, along with other industry analysts, speculates that BlueLinx, which is projected to have an annual revenue of roughly $3 billion in 2025, is a solid acquisition target. The public company sells lumber, siding, panels, millwork, and industrial materials, and could be strategically aligned with QXO’s roofing emphasis and enable cross-selling synergies.
84 Lumber
The company, which had $6.2 billion in total sales in 2024, could be another potential lumberyard target. The company fits the profile of a private, family-owned business, and would fall into the category of a “transformational” acquisition for QXO.
US LBM
US LBM, a private company that sells doors, windows, wallboard, millwork, roofing, siding, cabinetry, decking, lumber, and other building materials, is a private company with total sales of $7.8 million in 2024. Bain Capital acquired a majority stake in US LBM in 2020. A source with knowledge of the building materials space says that many industry players see the company as a potential acquisition target, assuming that Bain Capital is willing to sell.
QXO’s growth strategy
Brad Jacobs, founder, Chairman, and CEO of QXO, has a tested growth playbook from his business ventures in industries such as logistics and equipment rental. He believes that this blueprint can be replicated to drive growth in the building materials space. Jacobs plans to get to $50 billion in annual revenue through a mix of acquisitions and organic growth fueled by increased efficiencies.
QXO’s technology-focused strategy, under the direction of a chief artificial intelligence officer, is focused on buying traditional distributors and merging them into one AI-driven digital platform to enhance efficiency and margin performance. The goal is to leverage technology and AI to increase efficiencies and double the revenues of acquisitions within three to five years.
There is some disagreement over how effective this strategy will be. Homebuilding industry veteran Ken Pinto argues that QXO’s strategy must overcome a structural data gap in the construction industry. However, Merkel believes that Jacobs is likely to be very successful in his endeavors with QXO.
“In our view, building products distribution is the ‘perfect industry’ for Jacobs, who has a repeatable playbook for customer-centric cultures, accretive M&A, and operational excellence,” Merkely wrote in a June 2025 analysis. “In distribution, technology is nascent as most competitors lack scale or want to preserve personal customer relationships. Key areas of opportunity include digital ordering, optimizing processes with AI, automating warehouses, and increasing truck efficiency.”
QXO’s only acquisition to date occurred in April 2025 when the company purchased Beacon Roofing Supply in April 2025 for $11 billion in an all-cash deal.
Since then, Jacobs has discussed ways that he plans to make Beacon more efficient, including creating a national call center dedicated to dormant accounts, increasing the number of cross-selling opportunities, using digital tools to reduce the number of price overrides, and selecting a single ERP for the entire company.
Jacobs also attempted to buy GMS for roughly $5 billion in 2025, but Home Depot ended up purchasing the company last September for $5.5 billion. Home Depot and Lowe’s have the financial capacity to undercut QXO’s future acquisition attempts, but Reuben Garner and John McGlade at The Benchmark Company believe that now is an ideal time for QXO to pursue its next acquisition.
“With Home Depot and Lowe’s each integrating acquisitions made in the last 12 months, we believe there’s a window for QXO to find its next asset with less competition than some investors fear,” the analysts wrote in a recent analysis.
QXO’s acquisition play signals an increasing amount of consolidation and M&A activity in the building materials industry, mirroring a similar trend happening in homebuilding.