Following confirmation of an unsolicited buyout bid, shares of GMS Inc. (NYSE: GMS) are rising in pre-market trade. The last check showed that the stock has increased 19.15% to $96.51.
The Proposal
In a press release, GMS confirmed that it has received an unsolicited offer from QXO, Inc. to buy all of the remaining GMS shares for cash at a price of $95.20 per share. The Board of Directors of GMS has responded by saying that, in accordance with its fiduciary duties and after consulting with independent legal and financial consultants, it would carefully consider the proposal. Until the evaluation process is over, no more remarks will be made.
Strong Q4 and FY2025 Financials Despite Market Challenges
For the fourth quarter and the entire fiscal year 2025, GMS had strong financial results in spite of difficult market conditions and high interest rates. The company’s fourth-quarter net sales of $1.33 billion were bolstered by increases in the volume of complementary products and ceilings. While Steel Framing saw pricing pressures, pricing resilience or growth was observed across all other major product categories.
Strong Cash Flow and Strategic Balance Sheet Management
GMS highlighted substantial cash flow generation during both the fourth quarter and full fiscal year. In terms of free cash flow conversion from Adjusted EBITDA, the quarter set a post-pandemic record.
In addition to carefully deploying money toward acquisitions, greenfield ventures, debt reduction, and opportunistic share repurchases, the business maintains a healthy balance sheet with no near-term debt maturities.
Growth Through Purchases and Additional Sites
In a move to strengthen its Complementary Products portfolio, GMS acquired Lutz Company, a respected EIFS distributor based in Brooklyn Park, Minnesota. The purchase expands GMS’s line of insulating products available in the Minneapolis area.
Additionally, GMS increased capacity and market share potential for its Valley Interiors operations by building two greenfield facilities in March 2025 under Watson Building Supplies in Owens Sound, Ontario, and June 2025 under the same name in Nashville, Tennessee.
Despite current market concerns, GMS is well-positioned for sustained development because of its strategic choices, strict financial management, and expansion initiatives.
