Billionaire investor and entrepreneur Brad Jacobs has announced his latest venture: a building products distribution company to be called QXO Inc.
Jacobs – who is board chairman with XPO and its spin-offs GXO Logistics and RXO – announced that his Greenwich-based Jacobs Private Equity (JPE) entered into an investment agreement with SilverSun Technologies Inc. (NASDAQ: SSNT) pursuant to which they will invest $1 billion in cash into SilverSun. The proposed investment is comprised of $900 million by JPE and $100 million by co-investors, including Sequoia Heritage.
Upon the closing of the equity investment, SilverSun will be renamed QXO, with JPE as its majority stockholder and Jacobs will become the company’s chairman and CEO. QXO will become a standalone platform for Jacobs’ new venture following the spin-off of the existing business to SilverSun stockholders.
“QXO plans to create a tech-forward industry leader in the building products distribution industry through accretive M&A and organic growth, including greenfield openings, with the goal of generating outsized stockholder value,” said the new venture on its website, adding that QXO is aiming “to achieve a revenue run-rate of at least $1 billion by the end of year one, at least $5 billion within three years, and tens of billions of dollars over the next decade. QXO’s scale should elevate the customer experience, increase sales force effectiveness and enable margin expansion.”
Jacobs opted to pursue this industry, according to QXO, because “the building products distribution industry is highly fragmented, with approximately 7,000 distributors in North America and 13,000 in Europe, according to industry observers … These market dynamics, together with the fragmented nature of the industry, offer a significant opportunity to unlock growth potential through scale and technology. National distributors can serve large customers across multiple geographies and project types with standardized efficiencies, providing consistent, data-driven customer services across a broad operating scope. Additionally, a scaled technology ecosystem can expand the array of value-added services offered to customers, such as jobsite visibility into product consumption, digital configuration tools for custom ordering and tracking, and virtual design capabilities that interface with product order flow.”
QXO will be Jacobs’ second new endeavor for 2024 – his first book, “How to Make a Few Billion Dollars,” which will be published on Jan. 15 by Greenleaf Book Group Press.
Photo courtesy XPO
