QXO started this year much like it did the last – amassing a huge cash war chest that was used to pull off one of more memorable acquisitions in roofing industry lore.

Last year’s $11 billion takeover of Beacon Building Products, announced just 12 months after Home Depot absorbed SRS Distribution, (now SRS Building Products) for $18 billion may not compare in size to last month’s pickup of Kodiak Building Products ($2.25 billion). Yet, put in scope, this is hardly a rinse and repeat scenario.

With more than 100 locations in more than two dozen states, Kodiak has reach. But the heavy concentration of branches in Texas and Florida helps QXO cement its footprint in high-volume roofing and construction markets of today and the future. Kodiak also specializes in lumber, concrete, gypsum and steel, a nice complimentary line-up to QXO’s bevy of roofing products currently in the fold.

Here’s what we’re wondering now that some of the dust from the QXO-Kodiak acquisition has settled:  

HOW DID THE MARKETS REACT?

QXO’s $2.25 billion acquisition of Kodiak Building Partners drew swift support from Wall Street, with analysts framing the deal as a meaningful step in the company’s aggressive roll-up strategy. Benchmark reiterated its Buy rating on QXO following the announcement and maintained a $50 price target, saying the transaction strengthens the company’s position in the highly fragmented building products distribution market and should be accretive. The firm also noted that QXO retains significant capital capacity for additional acquisitions, reinforcing confidence in CEO Brad Jacobs’ consolidation strategy

Investors appeared to agree. QXO shares surged roughly 16.6% on the day of the announcement, closing near $27.07 after hitting a new 52-week high intraday. Analysts and market observers interpreted the rally as a sign that investors view the Kodiak purchase as strategically sound and aligned with QXO’s plan to scale through acquisitions while leveraging procurement efficiencies, network optimization and technology improvements to drive margin expansion.

WHAT WILL BRAD BUY NEXT?

He’s not done. Not even close. Jacobs, who just authored a book “How to Make a Few More Billion Dollars” reportedly has about $8 billion to work with for the next endeavor, and he’s not sitting on it.  

As industry observer Craig Webb, author of Webb Analytics, astutely pointed out recently, the decision of what to do next could depend on how the future QXO/Kodiak moves its lumber. Should Jacobs decide to get into the lumber arena, he certainly has the cash, and now with Kodiak’s experienced people in-house, may have the know-how to make it work.   

WHAT’S THE HUMAN IMPACT?

Shortly after taking over Beacon, Jacobs said undisciplined discounting was hurting the company, which shed about 250 senior employees. Officials said about that amount were replaced by a similar number of new hires in sales, operations and logistics.

QXO has a technology-driven operations model, and we learned that there are human costs associated with organizational changes that a merger or acquisition brings about. Despite some losses in talent, there’s a possibility to gain or retain people in a reorganization, which might help stem any concerns about uncertainty.

That tends to be the bigger drag on a company’s success emerging from an acquisition, according to a TalentLMS/WorkTango survey of 1,200 American employees who underwent a significant workplace transition over the past year. The study found that uncertainty has tangible effects on morale and retention. According to the findings, 43% of employees said their job security felt worse and 45% said their job satisfaction declined after a major change.

How that plays out after another major acquisition in roofing remains to be seen.  Maybe we’ll have it figured out by this time next year – if the next big move takes that long.