As it pursues an acquisition of specialty building materials distributors Beacon Roofing Supply, QXO upped the ante on Feb. 12 by stating its full slate of nominees that would replace Beacon’s current board of directors.

Additionally, QXO shared that it has obtained antitrust clearance in the United States and Canada for the transaction.

Both developments would expedite the transaction process if QXO and Beacon eventually come to a deal.

QXO — a building materials distribution and technology platform formed in late 2023 and officially launched last year — said it has informed Beacon that it will propose 10 independent director nominees at Beacon’s 2025 annual shareholders meeting that would replace Beacon’s board.

In a news release, QXO said that shareholders meeting is expected to be held in May.

The proposed slate of board nominees consists of current and former senior executives and directors of large, global companies, including manufacturers, distributors, logistics service providers and advisory firms.

QXO’s proposed nominees:

Sheree Bargabos — A 37-year veteran with building and composite material systems maker Owens Corning, having retired in 2015. Her tenure there included 10-plus years as President of roofing and asphalt for over a decade. She has served on the board of Steel Dynamics, Inc. since 2018 and formerly was a non-executive director of the board and member of the governance committee of PGT Innovations, Inc. 

Paul Camuti — Former EVP and Chief Technology and Sustainability Officer of Trane Technologies. He previously served as CTO and corporate sustainability and innovation lead at Ingersoll Rand for nine years.

Karel Czanderna — Former President, CEO and Board Director of Flexsteel Industries, Inc. Before that, she was group president of the building materials division of Owens Corning and earlier held divisional executive roles with Whirlpool. She currently serves on the boards of Cibo Vita and Soteria Flexibles and previously served on the board of BlueLinx Holdings.

Jonathan Foster — Founder and Managing Director of Current Capital Partners, an independent advisory and merchant banking firm. His 35-year career in financial and investment services includes 10 years with Lazard, Inc. QXO noted Foster has served on more than 40 corporate boards, including current roles for Berry Global Group, Five Point Holdings and Lear Corp.

Mauro Gregorio: — Former PDowresident of Performance Materials & Coatings at Dow Inc. He previously served as CEO of Dow Silicones Corp. (formerly Dow Corning) and President of Dow Consumer Solutions. He currently serves on the board of Eagle Materials and sits on the audit and corporate governance, nominating and sustainability committees. Gregorio also serves on the board of Radius Recycling.

Michael Lenz — Former CFO of FedEx, where he had an 18-year career, former serving as SVP and treasurer. He previously was with American Airlines for 11 years in investor relations, international network and strategic planning roles. Lenz currently serves on the board of Methodist Le Bonheur Healthcare.

Teresa May — President and owner of H+G Advisory, LLC and an advisor for portfolio operations at private equity firm KPS Capital Partners. Previous positions include Chief Marketing Officer for American Woodmark Corp., head of global strategic marketing for Owens Corning and President of Healthcare and Chief Strategy Officer of security solutions for Stanley Black & Decker. May is currently on the board of Fluidmaster and previously served on the boards of American Woodmark and Transcendia.

Stephen Newlin — Former President, CEO and Chairman of chemicals distributor Univar Solutions. He formerly was president, CEO and Chairman of PolyOne Corp. (now Avient). Newlin is currently Chairman of Oshkosh Corp.

Joseph Reitmeier — Former CFO of Lennox International. Since 2016, he has served on the board of Watts Water Technologies.

Wendy Whiteash — Former EVP, Integration and Strategic Priorities for building materials distributor US LBM Holdings. She previously served as US LBM’s Chief Human Resources Officer. Whiteash spent the first 17 years of her career with Ferguson Enterprises.

“We are proposing a slate of high-caliber, independent director nominees who are astute at delivering value to shareholders of large public companies,” said Brad Jacobs, QXO Chairman and CEO. “If elected, our nominees would give Beacon’s shareholders a direct voice in advocating for an independent evaluation of QXO’s proposal.

A QXO spokesperson provided MDM the following notes about the proposed board:

• All have industrial sector experience
• 80% have public board experience
• 70% have building products distribution experience
• 70% have CEO or CFO experience
• 60% have M&A experience

Morgan Stanley & Co. is QXO’s lead financial advisor, and Paul, Weiss, Rifkind, Wharton & Garrison LLP is its legal counsel.

Beacon Responds

Shortly following QXO’s announcement, Beacon’s board provided a response of its own, saying QXO’s proposal is an “attempt to pressure Beacon’s board into accepting an unchanged offer price that significantly undervalues Beacon’s prospects for growth and value creation, which the board previously rejected.”

The statement defended Beacon’s board members, noting their qualifications and role in generating shareholder value:

“Beacon’s Board consists of ten highly qualified directors – nine of whom are independent – who have been critical in overseeing the Company’s successful execution of its Ambition 2025 plan, which generated total shareholder returns of more than 200% during the past five years1 and delivered above market growth and superior financial and operational results, including 11 straight quarters of record net sales.

Each of our Board members brings the skills, knowledge, experience and tenure necessary to guide the company’s strategic and operational direction, as well as a firm and demonstrated commitment to acting in the best interests of Beacon and all of its shareholders. Their expertise spans an array of industries relevant to Beacon’s continued success, including industrial manufacturing, national and international distribution, supply chain, information technology, logistics, e-commerce, strategy, marketing, brand management, cybersecurity and finance.”

— Beacon’s Board of Directors, responding to QXO’s proposed board nominees (Feb. 12)

Beacon said its board will evaluate QXO’s director nomination notice and present its recommendations in the company’s proxy statement that will be filed with the SEC ahead of Beacon’s annual shareholders meeting.

Antitrust Cleared – QXO Calls for “Poison Pill” Removal

On the antitrust front, QXO confirmed that the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act has expired and that it has received early termination of the waiting period from the Canadian Competition Bureau.

Alongside the clearance announcement, QXO Chairman and CEO Brad Jacobs called upon Beacon to remove the shareholder rights agreement Beacon adopted in late January that the company said is a means of protecting stockholder interests and maximizing value for them.

“With committed financing in place and these necessary regulatory approvals secured, QXO is prepared to complete this acquisition and deliver immediate, compelling value to Beacon shareholders,” said Brad Jacobs, chairman and chief executive officer of QXO. “Beacon should remove its shareholder-unfriendly poison pill so shareholders can benefit from our premium all-cash offer.”

Previous QXO-Beacon Coverage

• QXO Says Beacon is Misrepresenting its Valuation to Shareholders (Premium) – Feb. 10
• QXO Urges Beacon to Let Shareholders Decide on Offer After Board Rejection – Feb. 6
• QXO Puts Ball in Beacon’s Court for Deal, Provides Communication Timeline (Premium) – Jan. 27

Background

QXO and Beacon have both staunchly held their opposing ground on the matter, with QXO sticking with its all-cash offer of $124.25 per share that it touts is a 37% premium to Beacon’s 90-day average share price as of Nov. 15 — the day before a Wall Street Journal report made its offer public — and a higher price than Beacon has ever traded at. Meanwhile, Beacon has consistently stated that the offer significantly undervalues the company.

Beacon is set to report its 2024 fourth quarter and full year financial results on Feb. 27 and will host an Investor Day on March 13 in New York City.