First the Earthquake, Now the Aftershocks: 7 Questions Following the QXO-Kodiak Deal

Commentary by Craig Webb

QXO’s acquisition of Kodiak Building Partners is raising lots of concerns across LBM. Vendors, buying groups, industry leaders, executive recruiters, and potential acquisition targets all are wondering about the impact on them as Chairman and CEO Brad Jacobs keeps pushing to grow QXO into a $50 billion company by 2030.

The $2.25 billion purchase of Kodiak’s 110 locations and 5,500 employees in 26 states (particularly Florida and Texas, source of 40% of its $2.4 billion in annual revenue) gives QXO a wide growth platform. Kodiak units sell not only lumber but also concrete, steel, and gypsum. They build enormous numbers of trusses, but also panels and doors. Their store footprint stretches from the Pacific Northwest to the Florida Keys.

So: How is this deal shaking up the industry? Here are seven questions to explore:

1. Kodiak buys a hefty amount of lumber through its membership in LMC. That co-op was created for independent, regional dealers, so how will its members feel about having in its ranks a publicly traded company with a national footprint? One can imagine the consternation if a QXO official were to sit on an LMC committee that reviews members' finances. Expect this issue to be discussed at LMC's annual meeting in mid-March.

2. If not LMC, who? Some other co-ops and distributors would be happy to take on a customer as big as Kodiak. The decision of where to go may depend in part on the next question ...

3. ... What kind of company will QXO buy next? Jacobs has at least $8 billion available for future acquisitions. If those funds and other monies help buy a giant lumberyard such as US LBM, QXO would get an in-house lumber-buying team. That would make moot the buying group question. But if QXO acquires a more commercially oriented, non-lumber firm, such as White Cap, it might need outside lumber buyers for a while.

4. Sixteen of Kodiak’s top 20 vendors also sold to Beacon, the dealer that QXO bought last year. A QXO spokesman touted the cross-selling opportunities between Kodiak and the current QXO. Given that opportunity plus its increased buying power, how much will QXO press its advantage during the next price negotiations with those vendors?

5. Kodiak's leaders have a huge amount of knowledge in parts of LBM that will be new to QXO, which until now has basically been a roofing company. How long will they remain? CEO Steve Swinney has indicated he would like to stick around. One outcome could be that the Kodiak arm of QXO will operate fairly independently, much as SRS Distribution is a distinct division of The Home Depot, and that Swinney will play a similar role as Dan Tinker does at SRS.

6. One place where you're unlikely to see separation involves the ERP system. QXO inherited a variety of software packages that are the legacy of Beacon rolling up so many companies over the years. Kodiak uses Epicor's BisTrack, which was created largely to serve multi-branch lumber operations. Which software will become the standard? Those discussions are only now beginning.

7.  Kodiak supported lobbying efforts by the National Lumber & Building Material Dealers Association. Will QXO--which has Jared Kushner, President Trump’s son-in-law, as a board member--do the same? Will Jacobs promote the same agenda as Swinney?

Kodiak generated about $2.4 billion in revenue and $211 million in EBITDA in 2025, so QXO's $2.25 billion purchase price puts the multiple at about 10.7x EBITDA and 0.95x sales. The deal excludes Kodiak Interiors Group, which Kodiak Building Partners spun off in July 2025. Court Square Capital Partners, which had owned the majority of Kodiak Building Partners, will retain ownership of Kodiak Interiors.

The transaction is expected to close early in the second quarter. The purchase price is $2 billion in cash plus 13.2 million QXO shares that QXO retains the right to buy back at $40 each. "When including synergies, the EBITDA multiple is ~7.3x, and the multiple is 6.8x based on Kodiak’s last five year average EBITDA of $330 million," a QXO spokesman said.

“The acquisition of Kodiak is highly complementary to our existing business," Jacobs said. "We’ll be able to deliver more value to customers across our combined base by cross-selling products and support services, and with a greater presence in key markets. And we expect the integration to accelerate margin expansion through scaled procurement, network optimization, AI-powered inventory management, and other tech-enabled operating efficiencies. 

"Our acquisition pipeline remains very active, with plenty of dry powder from our recently announced equity financings led by Apollo Global Management and Temasek," Jacobs added. Prior to the deal, it was believed that QXO had amassed roughly $11 billion in funding it could use for acquisitions.

"QXO is the most exciting company in the industry," Swinney, who helped co-found Kodiak in 2011, said in the news release. "By joining forces, we’re moving from strength to strength to unlock new opportunities for our customers and employees. I want to thank our employees for building a high-quality business at Kodiak and for the value created over the past 15 years, including the last eight with Court Square. I look forward to an even more exciting future as part of QXO.”

Private equity companies like Court Square normally try to take profits from their investments after about five years. It is believed that Court Square has been trying to sell Kodiak for at least two years.