-- QXO (QXO) has agreed to acquire insulation products company TopBuild (BLD) in a cash-and-stock deal worth roughly $17 billion, as the roofing products distributor aims to expand its building products portfolio.
Shareholders of TopBuild will have the option to receive $505 per share in cash or 20.2 shares of QXO, subject to proration, with the cash portion capped at 45% of the consideration, according to a Sunday statement. The per-share cash consideration represents a premium of about 23% to TopBuild's closing price on Friday.
TopBuild's stock jumped 20% in Monday's most recent premarket activity, while QXO declined 1.5%.
"TopBuild will be our most significant acquisition yet, making QXO the second largest publicly traded building products distributor in North America," QXO Chief Executive Brad Jacobs said in a statement. "The TopBuild transaction will also give us critical mass in the insulation sector and expand our exposure to large, complex projects like data centers, where scale matters."
The companies expect the deal to combine QXO's position in roofing, waterproofing and lumber-related building materials with TopBuild's insulation capabilities, creating an entity with $18 billion in combined revenue, according to Jacobs.
The transaction, which requires approval from both companies' shareholders, is expected to complete in the third quarter. Following completion, QXO expects to have 28,000 employees and 1,150 locations across the US and seven Canadian provinces.
"We're excited to join QXO and combine our leadership in insulation installation and specialty distribution with QXO's scale, technology, and procurement capabilities," according to TopBuild CEO Robert Buck. "Together, we'll enhance customer service, unlock meaningful cross-selling opportunities, and drive continued growth and operating efficiency."
QXO estimates the deal to be immediately and substantially accretive to its earnings. It also forecasts roughly $300 million in synergies from the integration of TopBuild by 2030, including revenue synergies from cross-selling an expanded range of integrated solutions.
"We see the deal adding 15%+ in (earnings per-share) accretion in 2027 given a combination of very high QXO valuation, strong margins at (TopBuild) and a potential for a better market for all in 2027," Truist Securities said in a Sunday client note.
TopBuild projects to record annual revenue of $9 billion to $10 billion by 2030, according to the statement. In 2025, the company recorded adjusted sales of around $6.2 billion.
In February, TopBuild said it expected sales to come in between $5.93 billion and $6.23 billion for 2026, while the current consensus on FactSet is for $6.05 billion.