Most buyout firms raise a fund and then go looking for a company. Brad Jacobs prefers to buy a public company first and decide later what it will become. On Monday morning, Nov. 9, he did it again.
CKX Lands, a Lake Charles, La., company that earns its living from oil and gas royalties, timber sales and surface rents, said Jacobs Private Equity II and minority co-investors have agreed to invest $1 billion in cash in the company, according to a joint release. Jacobs’s family office is putting in $900 million. The other $100 million comes from co-investors led by HRTG Partners, formerly Sequoia Heritage. When the deal closes, Jacobs will become chairman and chief executive of CKX, which will be renamed and “operate as a standalone public company platform in an industry to be determined.”
He will keep his day job. Jacobs remains chairman and chief executive of QXO, the building-products distributor he built by the same method.
“I love building multibillion-dollar market leaders, and this $1 billion investment marks the launch of my ninth company,” Jacobs said in the release. “After concluding my chairmanships of XPO, GXO, and RXO last year, I now have the capacity to create this new venture while continuing to lead QXO to its massive potential.”
The structure
The terms are the whole story, and they are worth reading slowly.
Before closing, CKX will convert from a Louisiana corporation to a Delaware one, put a new holding company on top and carry out a 4.1744380-for-1 reverse stock split. The investors then receive voting, convertible perpetual preferred stock convertible into about 219 million common shares at $4.57 a share, or $1.09 before the split. They also get warrants for roughly another 219 million shares. Half of those are exercisable at $4.57, a quarter at $6.85 and a quarter at $13.70.
After closing, the release says, the investors will own about 99.78 percent of the company on a fully converted basis, before counting the warrants. In other words, the existing shareholders keep about one-fifth of 1 percent of a company that will hold $1 billion of new cash and Brad Jacobs.
They are paid for the privilege. CKX will declare a cash dividend of $20.8 million, or $10.1312 a share, to holders of record shortly before closing, funded from the investment proceeds and cash on hand. The board approved the deal unanimously. Holders of about 28 percent of the voting power have signed agreements to vote for it, and closing is expected in early 2027, subject to a shareholder vote.
“We expect our stockholders will benefit from retaining the value of our existing land business while also participating in the potential upside of Brad Jacobs’ future plans for the company,” said William Gray Stream, CKX’s president.
The precedent
The model is familiar to anyone who watched QXO. In 2024 Jacobs led a roughly $4 billion investment in SilverSun Technologies, a small software reseller, and renamed it QXO. He then used it as a vehicle for large acquisitions in building-products distribution, including the purchase of Beacon Roofing Supply. The release says Jacobs has founded or led eight billion-dollar companies, among them United Rentals and United Waste Systems, and that he and his teams have completed about 500 acquisitions.
What makes the playbook work is the shell’s simplicity. CKX is small, simple and already listed on NYSE American. A clean public company with $1 billion of cash can raise more equity or debt and do deals with stock. That is what Jacobs is buying. The land business is the wrapping.
The risks, from the company’s own fine print
The release’s cautionary language is unusually candid, and it reads like a short-seller’s checklist. It warns of the stock’s low public float and price volatility, the possibility that later financings “may significantly exceed the amount of the equity investment” and cause “substantial dilution,” dependence on Jacobs personally, and the chance that his “past performance may not be representative of future results.” It also notes that the company may use the “controlled company” exemption, which would let it skip a majority-independent board. And it flags “the uncertain nature of the industry” Jacobs plans to enter, which is a polite way of saying nobody yet knows what CKX will buy.
For the old shareholders, the bet is simple: take the $10 dividend and ride along with a famously acquisitive chief executive. For new investors, it is a bet on a man rather than a business. Jacobs’s record makes that bet more reasonable than it sounds. It does not make it less of a bet.
The advisers
Morgan Stanley is financial adviser to Jacobs Private Equity, and Paul, Weiss, Rifkind, Wharton & Garrison is its legal adviser. TAP Advisors and the New Orleans firm Fishman Haygood are advising CKX. The company held a call at 8:30 a.m. to discuss the deal along with QXO’s preliminary third-quarter results.
The new industry, Jacobs’s ninth, will be named later. On the evidence of QXO, the announcement will come with a very large number attached.
Featured image: Downtown Lake Charles, Louisiana, home of CKX Lands. Photo by CTtcg via Wikimedia Commons, public domain.
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