NEW YORK, NY / ACCESSWIRE / April 8, 2024 / 1847 Holdings LLC ("1847" or the "Company") (NYSE American:EFSH), a holding company specializing in identifying over-looked, deep value investment opportunities in middle market businesses, today announced the execution of a non-binding Letter of Intent to acquire a large, established millwork, cabinetry and door manufacturer based in Las Vegas, NV.
The Las Vegas-based target generated approximately $28.6 million in revenues (unaudited), approximately $4.5 million in net income (unaudited) and approximately $5.2 million in adjusted EBITDA (unaudited) in 2023 and currently has almost a year's worth of contracted backlog booked for 2024. The purchase price for this transaction is $16.75 million and is expected to be completed during the third quarter of 2024, subject to the negotiation and entry into a definitive purchase agreement and the satisfaction or waiver of customary closing conditions. The proposed acquisition carries a purchase price of 3.2x 2023 EBITDA, and the Company expects to finance the entire transaction using debt.
"This is a very attractive acquisition for our Company," commented Ellery Roberts, CEO of 1847 Holdings. "We have strong industry insights into the western US market for construction and the end market demand for cabinets, doors and millwork in particular. We intend to keep this transaction separate from our existing cabinet operations under the Signature Home Craft (SHC) brand. We see these as two separate paths for independent value creation, with SHC focused on residential, and the new target focused on commercial, mixed-use, and high density residential."
"We negotiated compelling transaction terms, and we believe we can successfully complete this transaction without a need to raise any additional equity at this time. We see this as a uniquely accretive opportunity that we believe will drive shareholder value," concluded Mr. Roberts.
About 1847 Holdings LLC
1847 Holdings LLC (NYSE American:EFSH), a publicly traded diversified acquisition holding company, was founded by Ellery W. Roberts, a former partner of Parallel Investment Partners, Saunders Karp & Megrue, and Principal of Lazard Freres Strategic Realty Investors. 1847 Holdings' investment thesis is that capital market inefficiencies have left the founders and/or stakeholders of many small business enterprises or lower-middle market businesses with limited exit options despite the intrinsic value of their business. Given this dynamic, 1847 Holdings can consistently acquire businesses it views as "solid" for reasonable multiples of cash flow and then deploy resources to strengthen the infrastructure and systems of those businesses in order to improve operations. These improvements may lead to a sale or IPO of an operating subsidiary at higher valuations than the purchase price and/or alternatively, an operating subsidiary may be held in perpetuity and contribute to 1847 Holdings' ability to pay regular and special dividends to shareholders. For more information, visit www.1847holdings.com.
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Forward-Looking Statements
This press release may contain information about 1847 Holdings' view of its future expectations, plans and prospects that constitute forward-looking statements. All forward-looking statements are based on our management's beliefs, assumptions and expectations of our future economic performance, taking into account the information currently available to it. These statements are not statements of historical fact. Forward-looking statements are subject to a number of factors, risks and uncertainties, some of which are not currently known to us, that may cause our actual results, performance or financial condition to be materially different from the expectations of future results, performance or financial position. Our actual results may differ materially from the results discussed in forward-looking statements. Factors that might cause such a difference include but are not limited to the risks set forth in "Risk Factors" included in our SEC filings.
Non-GAAP to GAAP Reconciliation
This press release contains financial measures that are not calculated in accordance with U.S. generally accepted accounting principles ("GAAP"). The non-GAAP financial measure used in this press release is adjusted EBITDA of the proposed acquisition target described above (the "Target"). The financial measures are not audited and are subject to change in connection with the audit of such numbers.
The non-GAAP financial information should be considered supplemental to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. Management, however, believes that this non-GAAP financial measure, when used in conjunction with the results presented in accordance with GAAP, although unaudited, may provide a more complete understanding of the Target's results and may facilitate a fuller analysis of Target's results. Management has chosen to provide this supplemental information to investors, analysts, and other interested parties to enable them to perform additional analyses of results and to illustrate the results giving effect to the non-GAAP adjustments shown in the reconciliation described in the next paragraph. Furthermore, the economic substance behind our decision to use such non-GAAP measures is that such measures approximate the Target's controllable operating performance more closely than the most directly comparable GAAP financial measures.
As noted above, the non-GAAP measure is adjusted EBITDA of the Target, which is net income adjusted for the items described in the table below.
Revenue | $ | 28,585,633 | ||
Expenses | (24,070,067 | ) | ||
Net Income: | $ | 4,515,566 | ||
Adjustments to Net Income | ||||
Interest | 111,391 | |||
Depreciation | 41,604 | |||
Compensation | 412,953 | |||
Personal Expenses | 90,207 | |||
Taxes | 25,547 | |||
Total Target Add-Backs | 681,702 | |||
Adjusted EBITDA | $ | 5,197,268 |
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SOURCE: 1847 Holdings LLC
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