Beacon Roofing Supply, Inc. BECN, a leading distributor of roofing, waterproofing and exterior products, has entered into a definitive merger agreement to be acquired by QXO, Inc. (QXO) in a deal valued at $11 billion. The transaction is set at $124.35 per share in cash.

The agreement has received unanimous approval from both boards. The deal is expected to close by the end of April.

BECN’s shares gained 2% during the trading session yesterday. Investors’ sentiments are likely to have been boosted by the potential benefits to be realized from this agreement.

BECN’s Path Forward After the Acquisition

Following QXO's initial offer last November, BECN evaluated strategic options to maximize shareholder value. After a detailed review, the company determined that this transaction offers the best outcome, providing an immediate premium and cash certainty in an uncertain market.

BECN’s transformation under Ambition 2025 has led to strong financial and operational growth. With nearly 600 branches across the United States and Canada, the company continues to expand margins and create value. The transaction will help accelerate expansion while supporting customers in their building needs.

Continued Focus on Ambition 2025 Plan

Beacon has been intently focusing on several strategic initiatives to drive its long-term ambition of growing and enhancing the customer experience, expanding top line and margin, and boosting value for customers, suppliers, employees and shareholders. To add value to the aforementioned expectations, the company is currently focusing on delivering the expected targets through the Ambition 2025 plan.

In 2024, Beacon has advanced greatly along its path of achieving Ambition 2025 targets. The accomplishments include 19 newly opened greenfield locations, 42 acquired branches, digital sales up 24.1% year over year and continued improvements across its branches falling in the bottom quintile of financial performance metrics. The company’s efforts to improve underperforming branches contributed $20 million to adjusted EBITDA, bringing the three-year total to $78 million and surpassing its $75 million Ambition 2025 target ahead of schedule.

BECN’s Share Price Performance

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Shares of this specialty wholesale distributor of roofing, waterproofing and related exterior products gained 45.6% in the past six months, outperforming the Zacks Building Products - Retail industry’s 5.7% decline. The early advancement in achieving Ambition 2025 targets and maintaining shareholder value amid ongoing macro risks are encouraging for the company’s prospects.

BECN’s Zacks Rank & Key Picks

Beacon currently carries a Zacks Rank #4 (Sell).

Here are some better-ranked stocks from the Zacks Retail-Wholesale sector.

BJ's Restaurants, Inc. BJRI currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

BJRI delivered a trailing four-quarter negative earnings surprise of 84.7%, on average. The stock has gained 6.3% in the past six months. The Zacks Consensus Estimate for BJRI’s 2025 sales and earnings per share (EPS) indicates growth of 3.3% and 17.7%, respectively, from the year-ago period’s levels.

Brinker International, Inc. EAT currently sports a Zacks Rank of 1. EAT delivered a trailing four-quarter earnings surprise of 24.7%, on average. The stock has surged 86.7% in the past six months.

The Zacks Consensus Estimate for EAT’s fiscal 2025 sales and EPS indicates a rise of 18.7% and 98.8%, respectively, from the year-ago period’s levels.

Sprouts Farmers Market, Inc. SFM currently sports a Zacks Rank of 2 (Buy). SFM delivered a trailing four-quarter earnings surprise of 15.1%, on average. The stock has gained 28.4% in the past six months.

The Zacks Consensus Estimate for SFM’s 2025 sales and EPS indicates a rise of 12% and 24.3%, respectively, from the year-ago period’s levels.

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This article originally published on Zacks Investment Research (zacks.com).

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