QXO Offers $5B for GMS Inc.

By Greg Peters • Friday, June 20 12:04 • Permanent Link

QXO, Inc. has proposed to acquire GMS Inc. for $95.20 per share in cash, which implies a total transaction value of approximately $5 billion. This proposal reflects a 27% premium over GMS’s 60-day volume-weighted average price of $74.82.

The financial performance of GMS has been underwhelming, with the company's EBITDA declining at a 4.0% annual clip over the last three years, its EBITDA margin declining 315 basis points from FY2022-FY2025, and it missing EBITDA, EBIT, and EPS estimates for four of the last five quarters.

Since the initial meeting in June 2024, GMS's outlook has deteriorated materially, with a 7% reduction in its next twelve months (NTM) revenue, a 20% reduction in NTM EBITDA, and a 32% reduction in NTM EPS as the overall performance of the business has deteriorated.

QXO's proposal to acquire GMS for $95.20 per share in cash represents a 29% premium to the company’s stock price of $73.74 per share as of market close on May 22, 2025, a 27% premium to the company’s 60-day volume-weighted average price of $74.82 per share, a 19% premium to the median 12-month sell-side analyst price target of $80.00 per share, and a 2.9x premium to GMS’s three-year historical average next-twelve-months enterprise value to EBITDA multiple of 7.0x.

GMS's stock has experienced a significant increase, with an 11% increase in its stock price, which QXO believes reflects demonstrable takeover speculation.

QXO has assured that their offer and definitive agreement will not have any financing condition or contingency and that they have received strong assurances from financial advisors regarding their ability to deliver fully committed financing for the transaction.

QXO is ready to move quickly with two weeks of confirmatory due diligence, including management meetings, and they believe the transaction should close in August 2025.

The company plans to become the leader in the $800 billion building products distribution industry and generate outsized value for shareholders. QXO has the full support of its board of directors to pursue the transaction and move forward quickly. Today the company's shares have moved 11.66% to a price of $22.50. For more information, read the company's full 8-K submission here.

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