Apollo Backs Brad Jacobs with $1.2 Billion War Chest for QXO's Building Products Blitz

January 5, 2026 · by Fintool Agent

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Apollo Global Management-0.19% is betting big on Brad Jacobs—again. The $908 billion alternative asset manager is leading a $1.2 billion convertible preferred stock investment in Qxo-4.84%, the building products distributor that Jacobs has positioned as his next multibillion-dollar empire. 1

Qxo-4.84% shares surged 19% to $23.51 on the news, pushing the company's market cap to nearly $16 billion. The stock closed just above the $23.25 conversion price embedded in the preferred shares—a level that represents an 18% premium to Friday's close.

The financing gives Jacobs exactly what he needs: flexible firepower to pursue acquisitions exceeding $1.5 billion in a fragmented $800 billion industry where he sees massive consolidation opportunity. 3

The Deal Terms

The investment structure reveals Apollo's conviction in Jacobs' playbook:

The perpetual nature of the preferred stock means Apollo isn't in a rush—they can wait for the right deals. The 4.75% dividend provides downside protection while the conversion feature offers equity upside if QXO executes. 12

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Why Apollo? Why Now?

This isn't Apollo's first rodeo with Brad Jacobs. The relationship traces back to United Rentals-0.58%, where Apollo-affiliated funds were early investors in Jacobs' equipment rental rollup.

"We note the Apollo partnership is building off Brad's long-standing relationships and earlier collaborations at United Rentals," RBC Capital Markets analyst Mike Dahl wrote in a note Monday.

For Apollo, this is a bet on a proven operator in an industry ripe for consolidation. Building products distribution remains highly fragmented, with hundreds of regional players that lack scale, technology, and capital.

The Jacobs Playbook: 500 Deals and Counting

Few executives have Brad Jacobs' track record at building billion-dollar businesses through M&A. Over four decades, he has executed nearly 500 acquisitions across six companies, creating tens of billions of dollars in shareholder value.

His playbook is consistent: identify fragmented industries with recurring revenue, acquire aggressively while integrating ruthlessly, layer on technology to drive efficiency, and let scale create a competitive moat.

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QXO's Transformation: From Shell Company to $16 Billion Distributor

Just 18 months ago, QXO was essentially a shell company sitting on $1 billion in capital raised from Jacobs and co-investors including Sequoia Heritage. Today, it's North America's largest publicly traded distributor of roofing, waterproofing, and complementary building products.

The transformation came via the $10.6 billion acquisition of Beacon Roofing Supply, which closed in April 2025. 2 That deal brought:

• 600 branches across all 50 U.S. states and seven Canadian provinces 3
• ~110,000 customers in residential and non-residential construction 4
• 135,000+ SKUs of professional-grade exterior products 5
• $2.7 billion in Q3 2025 revenue 6

The integration hasn't been without challenges. QXO reported a net loss of $139.4 million in Q3 2025, weighed down by $117.8 million in amortization from acquired intangibles and integration costs. 7 But the operating fundamentals look solid: gross margin expanded to 23.3% and the company generated positive operating income of $25.8 million in Q3. 8

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The $50 Billion Ambition

Jacobs isn't stopping at Beacon. The company has outlined a target of $50 billion in annual revenues within the next decade through accretive acquisitions and organic growth. 1 That would represent a 10x increase from current levels.

The Apollo capital positions QXO to pursue additional large deals. Jacobs already tested the waters last year with an unsolicited $5 billion bid for GMS Inc., another major building products distributor. Though that deal fell through when Home Depot's+0.27% SRS Distribution unit ultimately acquired GMS, it signaled QXO's appetite for transformative M&A.

The building products distribution market offers plenty of targets:

• Highly fragmented with hundreds of regional players
• Scale advantages in purchasing, logistics, and technology
• Recurring demand from construction, repair, and renovation
• Counter-cyclical elements as storm damage drives emergency roofing demand

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What to Watch

Near-term catalysts:

• Q4 2025 earnings (expected February 2026)
• Announcement of qualifying acquisition by July 15, 2026
• Integration progress at Beacon operations
• Potential NYSE stockholder approval for full conversion rights

Key risks:

• Execution risk on integrating Beacon while pursuing new deals
• Interest rate sensitivity on construction demand
• Tariff impacts on building materials
• Competition from Home Depot+0.27%/SRS Distribution combination

The Apollo investment removes the capital constraint. The question now is whether Jacobs can find the right deals at the right prices—and whether his team can absorb multiple large acquisitions simultaneously.

If history is any guide, betting against Brad Jacobs in a fragmented industrial market hasn't been a winning strategy.

Related:

• Qxo Company Profile-4.84%
• Apollo Global Management Company Profile-0.19%
• United Rentals Company Profile-0.58%
• Xpo Company Profile-2.60%