QXO, Inc., the newest contender in the building envelope products distribution category, announced last week that it has entered into purchase agreements with certain institutional and accredited investors for a $3.5 billion private placement financing.

In a June 13 news release, the company said the private placement involved selling 340,932,212 shares of common stock for $9.14 per share and 42.0 million pre-funded warrants for $9.13999 per warrant. 

The Private Placement is expected to close early in the third quarter of 2024, after which QXO will have approximately 341.6 million outstanding shares of common stock. QXO is traded on the NASDAQ under the ticker QXO. 

On a fully diluted basis, following the closing and giving effect to the conversion of QXO’s one million outstanding shares of preferred stock and the exercise of the 219 million outstanding warrants attached to its preferred stock (assuming cash exercise), as well as the exercise of the pre-funded warrants to be sold in the Private Placement, the company would have approximately 821.6 million outstanding shares of common stock.

As reported earlier this month, QXO, founded by entrepreneur Brad Jacobs, is gunning to become a significant player in the $800 billion building products distribution industry. The company is targeting “tens of billions of dollars of annual revenue in the next decade through accretive acquisitions and organic growth.”

According to Bloomberg, the large sum raised is the largest equity offering ever in the building products industry and the largest private investment ever made in an industrial company, public or private.

Jacobs has previously said he plans to build QXO into a $50 billion revenue company over the next decade, and QXO declined to comment beyond the release. Still, a person familiar with the investment said investors include several well-known firms, including long-time XPO shareholders Orbis Investment Management and T. Rowe Price, Morgan Stanley Investment Management, Liberty Mutual, Sequoia Heritage, and Madrone Capital Partners, the investment firm backed by Walmart's Walton family.

For more information, visit qxo.com.

*This article was updated at 10:58 a.m. (EDT) on June 19, 2024, reflecting Bloomberg confirmed the historical nature of capital raised.