Updated at 9:53 a.m. on June 19

QXO Inc. delivered an unsolicited all‑cash proposal on June 18 to acquire GMS Inc., one of North America’s largest specialty distributors of interior construction products — wallboard, ceiling systems, steel framing, insulation and related tools — for roughly $5 billion.

The offer of $95.20 per share represents a 27% premium over its recent trading levels, according to a letter sent on Wednesday to GMS’s CEO, John Turner. GMS trades on the New York Stock Exchange under the ticker GMS. The company has a market cap of $3.11 billion and closed up more than 10% on Wednesday at $81.01. 

In a June 19 research note, investment banking firm William Blair analysts pointed out that QXO’s offer equates to roughly 10 times fiscal 2026 EBITDA, compared with QXO’s own trading multiple of 24 times next‑12‑month EBITDA, underscoring the deal’s highly accretive nature.

For drywall installers, ceiling contractors, roofing firms, and building materials suppliers, the deal promises faster deliveries, richer inventories, and upgraded technology — potential game-changers in an industry buffeted by rising material costs and supply chain uncertainty.

QXO’s offer is consistent with the ongoing consolidation within the building products distribution sector as roll‑up specialists and private equity investors seek scale, efficiency and geographic reach. 

GMS, with more than 300 distribution centers across North America, supplies wallboard, ceiling tiles, steel framing and related products.

QXO, backed by veteran dealmaker Brad Jacobs, aims to fold GMS’s network into its own platform — already bolstered by the April acquisition of Beacon Building Supply — to deliver what contractors increasingly demand: same‑ or next‑day service, on‑demand digital ordering and consistent pricing amid volatile input costs.

GMS, founded in 1971 and based in Tucker, Ga., is North America’s largest specialty distributor of interior construction products. Its “stock‑and‑scatter” model stocks branch‑level inventories for rapid delivery, serving both residential and commercial contractors. 

Yet, as QXO pointed out in its letter, recent results have been disappointing: GMS’s EBITDA fell at a 4% annual clip over the past three years, and its margin contracted to 9.1% in fiscal 2025 from 12.2% in fiscal 2022, even as its peers held steadier.

The Deal’s Logic

In the June 18 letter, QXO argues that combining the two companies would yield tangible benefits for contractors. At $95.20 per share in cash — roughly a 29% premium to the closing price on May 22 — the bid reflects immediate value, free of financing contingencies, and targets a close by August 2025. 

William Blair forecasts that, "upon closing, the combined entity could accelerate QXO’s path toward $50 billion in revenue by 2033, with EBITDA rising to $4.8 billion by 2030 under a disciplined M&A strategy and operational excellence,” analysts wrote.

Chief among QXO’s commitments, the letter states, is delivery speed: the company pledges to reduce order-to-delivery times by up to 20% by integrating Beacon’s EagleView-powered measurement tools into GMS’s interior construction network. 

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That enhancement, already proven to roofers, would allow drywall and ceiling installers to generate precise takeoffs and place material orders more quickly. Analysts at MDM Projects estimate such integration could extend same‑ or next‑day coverage to roughly 75% of U.S. counties.

QXO also projects that inventory availability would climb substantially. Dan Peters, a senior analyst at MDM Projects, forecasts that branch‑level SKU availability could increase by as much as 30% thanks to QXO’s purchasing scale, coupled with GMS’s regional footprint. 

For contractors, this means fewer job delays caused by missing specialty items—such as acoustical tiles, metal studs, or tapered-edge beads — that are often unavailable through smaller, regional suppliers.

Beyond logistics and inventory, QXO promises a unified technology platform. Under the proposal, GMS’s digital ordering portal would be merged with QXO’s mobile app, providing contractors with on-demand access to live inventory levels, GPS tracking of delivery trucks, and automated reordering for high-volume products. 

The unified system, currently established across QXO’s roofing distribution network, aims to fulfill the just-in-time scheduling requirements of contemporary job sites, particularly in residential and light commercial construction.

For professional contractors, these enhancements could lower project costs and improve scheduling accuracy. In the face of a 9.7% annualized rise in construction input prices through March — driven, economists say, by tariffs on steel, lumber, and insulation — stable pricing and rapid fulfillment are vital to protect margins. 

A mid‑size drywall firm might shave two days of material waiting per month, saving roughly $10,000 annually on a $2 million revenue base. Roofing contractors, already benefiting from QXO’s EagleView-enabled takeoffs, may see drywall waste reduced by an estimated 5% per project when that technology is extended to interior products.

Potential Hurdles

Yet consolidation carries risks. Fewer independent distributors may erode contractors’ leverage in negotiating pricing and terms, particularly in rural markets where GMS is often the sole supplier. 

QXO itself warns that “system migrations and branch consolidations” could cause short-term service disruptions during the estimated two-week due diligence period and the merging of the enterprise resource planning systems of the two large companies.

Regulatory scrutiny appears manageable but remains a concern. QXO secured antitrust clearance for Beacon, and the company said it expects a similar path with GMS. However, as Reuters reported in April, the Federal Trade Commission has indicated a close review of large deals of $5 billion or more in concentrated industries. 

If the GMS board rejects the proposal, QXO would likely have to present its bid directly to shareholders, which would extend an otherwise perfunctory acquisition into a six-month saga that many readers are already familiar with. 

However, according to Jacobs’ letter to GMS’s CEO, the company appears to be amenable to the entreaty: “We have heard from industry participants that J.P. Morgan and Jefferies have been aggressively marketing [GMS] for sale," he wrote. 

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QUICK READ

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A $5 Billion All-Cash Offer: QXO’s $95.20-per-share offer represents a 27% premium over GMS’s recent trading average, signaling serious intent and delivering immediate value to shareholders with no financing contingencies.

Promise of Faster, Smarter Distribution: QXO aims to cut order-to-delivery times by up to 20% by integrating EagleView-powered measurement tools and logistics systems into GMS’s network, potentially enabling same- or next-day service for contractors in 75% of U.S. counties.

Deeper Inventory and Digital Integration: Analysts forecast a 30% increase in SKU availability at the branch level, along with a unified mobile ordering platform offering live inventory, GPS tracking, and auto-replenishment for high-demand items.

Contractor Impact: Customers could benefit from reduced material delays and improved scheduling, but risk losing flexibility and bargaining power if local distributors consolidate or service is disrupted during the integration process.

A Bellwether for Industry Consolidation: Jacobs-led QXO is executing a “roll-up” strategy in building materials similar to past efforts at XPO and United Rentals, signaling continued consolidation in a sector long dominated by regional players.

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Outlook

GMS has until June 24 to respond. If the board rebuffs the proposal, QXO may launch a proxy campaign among shareholders, increasing pressure to accept cash value over public-market volatility. Contractors should watch for signs of approval or shareholder dissent. 

A successful merger has the potential to transform supply-chain performance benchmarks in both interior and exterior construction sectors, as long as QXO can fulfill its contractor-focused commitments while preserving the local service relationships that specialty trades rely on.