GMS Stock Soars 30.85% on QXO's Takeover Bid

GMS Inc. (GMS) has seen a significant surge in its stock price, rising by 30.85% in pre-market trading on June 20, 2025. This dramatic increase comes on the heels of an unsolicited takeover proposal from QXO, Inc. (QXO), which has offered to acquire all outstanding shares of GMS for $95.20 per share.

QXO's proposal has sparked a bidding war for GMS, with Home Depot also expressing interest in acquiring the company. QXO's all-cash offer of $95.20 per share represents a 27% premium over GMS's 60-day volume-weighted average price, highlighting the aggressive financial play by QXO. This offer has been met with enthusiasm by the market, as GMS's stock has seen a significant increase in value.

QXO, led by serial acquirer Brad Jacobs, has a history of building its industrial empire through rollup strategies, such as those employed with XPO Logistics and United Rentals. The acquisition of GMS aligns with QXO's model of acquiring fragmented market players to consolidate scale and pricing power. GMS's operational resilience, as evidenced by its $1.33 billion in Q4FY25 revenue, makes it an attractive target for QXO.

Home Depot, on the other hand, is interested in GMS's distribution network and contractor relationships, which could amplify its push into the professional services segment. Home Depot's prior acquisitions of HD Supply and SRS Distribution highlight its strategy to dominate the B2B supply chain. However, regulatory risks may arise due to Home Depot's expanding footprint and its existing dominance in retail and contractor supplies.

The construction materials distribution sector is notoriously fragmented, which could shield the deal from immediate regulatory intervention. However, Home Depot's history of acquisitions raises red flags, and the potential for delays or conditions could dilute shareholder returns. QXO's reliance on private-equity-style leverage may also raise eyebrows, as its debt-laden balance sheet and prior turnaround strategies could deter shareholders seeking stability over speculative upside.

GMS's board faces a binary choice: accept QXO's immediate premium or wait for a Home Depot bid that may offer higher strategic value but greater execution risk. Shareholders are caught between two compelling but divergent visions, with the market already pricing in optimism. Analysts project a one-year target of $87.47 for GMS, but this lags behind QXO's $95.20 offer. A bidding war could push the valuation higher, while a board rejection of QXO's terms could invite a hostile takeover, further inflating volatility.