QXO, Inc. 8-K

What Happened

• On January 5, 2026, QXO, Inc. filed an 8‑K disclosing an Investment Agreement with AP Quince Holdings, L.P. (an Apollo-managed fund) and other investors committing up to 114,500 shares of new Series C Convertible Perpetual Preferred Stock for an aggregate purchase price of $1,145 million (stated value $10,000 per share).
• The commitment is effective through July 15, 2026 (the “Initial Commitment Period”) and may be extended up to 12 months for a Qualifying Acquisition if a definitive agreement is signed before the Initial Commitment Period expires. Proceeds are intended to fund one or more Qualifying Acquisitions (targets with purchase price > $1.5 billion) and related fees and expenses.

Key Details

• Commitment size: up to 114,500 Series C shares for $1,145 million (Stated Value $10,000/share).
• Dividend and conversion: 4.75% annual dividend (payable quarterly in cash and/or common shares) and initial conversion price of $23.25 per common share.
• Timing and caps: Company may force conversion after year 2 subject to market price tests; optional redemption beginning after year 7 (redemption pricing steps); conversion capped at 19.99% of outstanding common shares unless stockholder approval is obtained.
• Restrictions: Transfer and hedging limits apply through April 5, 2027; standstill provisions limit investor acquisitions for 18 months and cap beneficial ownership at 7.5% during that period.

Why It Matters

• This transaction provides QXO a committed $1.145 billion financing source specifically to pursue large acquisitions, which could materially change the company’s size or strategy if a Qualifying Acquisition closes.
• For common shareholders, the Series C carries senior liquidation preference and can be converted into common stock or paid in common shares for dividends, creating potential dilution if conversions or share‑paid dividends occur. The 19.99% conversion cap and required stockholder approval are important limits on immediate dilution.
• Standstill and transfer restrictions reduce the likelihood of investor activism in the near term but also limit Convertible Preferred Investors’ ability to increase public holdings. The filing also includes registration and customary closing conditions (e.g., HSR clearance, accuracy of reps) and a press release announcing the deal.