Brad Jacobs
Brad Jacobs has created a reputation as a prolific industrial merchant, transforming fragmented and intensive sectors in labor into higher margin companies, driven by technology.
For five decades, he has founded or directed four public companies “Multibagger”: United Waste Systems (1989); United Rentals (2001), now the largest firm in the world; XPO Logistics (2011), a global goods center; and QXO (2024), its $ 800 Opportunity Platform in Distribution of Construction Products.
The Jacobs M&A game book has fueled more than 500 acquisitions and has routinely doubled the benefits in five years.
With several goals simultaneously, negotiating several multiple earnings below their expected assessment after investment and reinvest this free cash flow on technological updates, Jacobs has routinely doubled the profits in the five years after closing.
At QXO, Jacobs aims to double Beacon’s profits within five years and accumulate -about $ 50 billion in annual income. This interview has been published for clarity and length.
Enr: From waste to rent to logistics to construction products, what basic principles of consolidation and integration have you done with the QXO strategy?
Jacob: Well, technology has facilitated business research and will communicate faster, but basic principles have not changed. M&A involves many small things, but ultimately success is reduced to some important things: you have to pay a fair price; You need to improve the margins through operational excellence. You have to grow the upper organic line above the market rate. And if you do these things, you will create the value of shareholders. Do we analyze each potential acquisition through the lens of: “Can we significantly increase the growth rate of organic income? Can we significantly increase the benefits through our game book? And can we buy it with a good discount as far as we market?” One of our principles is that we always talk with many goals at the same time … so we do not fall in love and we do not fall in love.
Given your acquisitions of 500 more, how have your approaches to due diligence evolved, risk assessment and post -merger integration from the united waste through XPO and now QXO?
We have always sought large and fragmented sectors with secular growth, wide efficiency gains and where the scale more technology gives a real advantage. The distribution of construction products checks each box: $ 800 billion in world sales, family -owned operators, low -technology penetration, strong boxes of home -free boxes and infrastructure. Integration is still on speed: immediate receiving through signaling and swag, consolidation of rapid systems and the creation of a unified culture through our internal social platform so that each branch, each employee and each client see a “QXO” from day one.
Was there any doubts about the replacement of an almost centenary brand with a single global identity?
Sellers usually ask: “Do not change our name,” due to the deep loyalty of customers. But we have learned that a global brand offers consistent standards of service, increases the morale of employees and alinea to everyone behind the same North Star. A unique name accelerates our cultural integration … and indicates the customers and suppliers that they will obtain the same quality everywhere.
After acquiring Beacon, what good practices can other delegated directors lend to soften subsequent transitions to acquisition?
First, deal with the agreement as shareholders, non -hostile, our proposal added a clear value, so the shareholders welcomed us. Then move -you quickly: in nine weeks, we had reduced management layers, redirected capital to front -line papers, and started in Sunset, ERP of Beacon’s legacy. It is crucially communicated with crystal and involve all employees from day one: aspect what to maintain, improve and request satisfaction qualifications on a 1-10 scale. This bidirectional dialogue comes out of great ideas, demonstrates respect and ignites a wave of positivity.
What digital or automated innovations in your “technological” reproduction book are you deploying to QXO?
We are embedding sophisticated tools everywhere. Dynamic price engines are in real time depending on the elasticity curves and the profitability at the client’s level. AI Agents helps our sales force prioritize the benefits and optimize the margins. A data lake of next generation and ERP Drive Drive Dashboards Live P&L. Machine learning forecasts increase the availability of items. WMS based on barcodes [warehouse management system] and tms with strength ai [transportation management systems] Standardize work flows and delivery routes. Even our new pos [point-of-sale] The system offers text to text, visibility of the margin in real time and complete integration of CRM.
Is there any risk of losing talent supporting much in technology?
Quite the opposite. Technology has based on each of my business for decades, but people always arrive first. Our equipment embraces new tools because they eliminate the occupied manual work, release staff from the branch to delight customers and sellers to sell more. The contractors want to associate with a technological distributor, and our employees see the IA and automation as allies, not replacement.
Enr: How have the regulatory expectations and ESC evolved that have shaped your investments in reduction of emissions, waste deviation and safety of workers?
The requirements change over time and we have always fulfilled or passed them. Safety is at the top of our basic values: each branch has a “safety safety decline” and weekly huddles. We invest in jobs without injuries, cultures free of discrimination and well -being of employees, both emotional and physical. Our goal is zero accidents, and we support it with capital, technology and training to ensure that all facilities exceed the standards of industry and regulators.
What tips would you give to the contractors, owners and manufacturers of teams seeking to innovate in heavy construction?
Identify the unique levers for your business: prices, recruitment, Sku rationalization, logistics, digital sales ability, and then think big, think clearly and move -you quickly. On the first day after buying Beacon, we received layers, flattened to increase accounts, hiring -to the branches to feed growth, and launched a transformation roadmap that covers prices, hiring, inventory assortment, logistics network design and sales compensation. The rate responsible for the execution unlocked the value for customers, suppliers and shareholders.
You said you have “the smartest of smart money” behind Qxo. Who are some of your sponsors and what roles have they played?
I really have been fortunate to have investors … they are the smartest of smart money. Sequoia Heritage has been an investor of mine to all my companies on the ground floor; Orbis … was one of our biggest investors in XPO and is my greatest investor after me a qxo. This is a kitchen cabinet, to say, I can pick up the phone and get opinions (tips and tips) that is extremely valuable. [Other investors include Jorge Paolo Lemann, Madrone Capital (which manages the Walton family’s money) and Cercano Management (which manages Paul Allen’s estate among other ultra-high net worth families). Management, too, has serious skin in the game: collectively, the board and the executive team, including me, own about 36% of [QXO’s] Equity and this level of shareholder alignment is rare and powerful.
Do you ever take a rest day? How is that?
I don’t see the job as a job, it’s fun. I love the people, the challenges and the excitement of building a winning team. Every day you feel like a day off because I do what I enjoy next to my classmates, I trust and respect.
When you look back your career, which legacy do you expect to leave as a business leader and as a person?
As for the business, I hope it is remembered for a repeatable game book that chooses fragmented and growing industries, executes M&A disciplined to double the benefits in five years and that generates returns of large -amount shareholders: 200 -Bagger United Rentals, 50 -Bagger XPO, 300 × in all my public companies. Personally, I want to be known for unbelievable integrity: to treat people with dignity, enhance talent, do things right and build cultures where everyone can excel, where I have seen and feed potential that others did not even see themselves.
