Home Solutions of America Enters Into Letter of Intent to Acquire Leader in Residential Granite Supply and Installation
17 February 2005 - 1:52AM
PR Newswire (US)
Home Solutions of America Enters Into Letter of Intent to Acquire
Leader in Residential Granite Supply and Installation Acquisition
to Be Immediately Accretive; Cornerstone Building and Remodeling
Has National Presence With Fortune 100 Customers Such as Home Depot
and Lowe's Companies DALLAS, Feb. 16 /PRNewswire-FirstCall/ -- Home
Solutions of America, Inc. (AMEX:HOM), a niche provider of
specialty residential services, announced today that it has signed
a letter of intent to acquire Cornerstone Building and Remodeling,
Inc. (dba: Cornerstone Granite & Marble or "Cornerstone"). The
purchase price is $12 million, payable via a combination of cash,
seller's note, and newly issued restricted common stock.
Cornerstone Building and Remodeling, Inc., based in Ft. Myers,
Florida, generated $12 million in revenue and EBITDA of $2.4
million over the past 12 months. Cornerstone will be a wholly owned
subsidiary of Home Solutions. The acquisition is expected to be
immediately accretive. The details of the transaction will be
released in an 8-K filing when the definitive agreement is
executed. Cornerstone is a leading supplier and installer of
granite materials for kitchens and baths to national home centers,
as well as national builders and remodeling companies, in the
southeastern United States. It supplies these materials through a
relationship with a captive wholesale company that owns rights to
various granite quarries in Brazil and Italy and has a twenty-year
purchase agreement to supply these products. In addition,
Cornerstone has a granite flooring and kitchen cabinet re-facing
business that is expanding into the home center market. The company
currently services over 104 Home Depot locations throughout the
southeastern United States, including its home state of Florida and
has an agreement with Lowe's Companies to provide services to over
269 home centers in the southeast. The acquisition of Cornerstone
is contingent on the execution of a definitive agreement, financing
and other customary closing conditions, and is anticipated to close
by March 31, 2005. As soon as the transaction is completed,
Cornerstone President and CEO Anthony Leeber, Jr. will be nominated
to serve on the Board of Directors of Home Solutions. Commenting on
the transaction, Home Solutions' Chairman and CEO Frank Fradella
stated, "In keeping with our strategy to provide more services for
the same homeowner, we are extremely pleased to announce our
agreement with Cornerstone. The Leeber family has been in this
industry for three generations and Cornerstone Building and
Remodeling has become a brand name in the southeast. Their
anticipated growth with major market leaders such as Home Depot and
Lowe's provides entry into new markets for Home Solutions.
Cornerstone already has an existing business relationship with Home
Solutions' wholly owned subsidiary Southern Exposure, and the
companies have developed an excellent working relationship.
Cornerstone will dramatically improve our service offering in the
area of kitchen cabinet and countertop manufacturing and
installation while adding significant synergies with our existing
operations. In addition, the remodeling component of Cornerstone,
especially in light of the hurricane-damaged areas of Florida, will
more proportionately balance our revenue portfolio. We are proud to
add Cornerstone and its management team to the Company and look
forward to having Anthony Leeber, Jr. join the Board of Directors."
"Home Solutions' ability to raise capital and provide a larger
geographical foot print is very important to accelerate the growth
of our business strategy," stated Mr. Leeber. "We sought a partner
which could support our plans for dramatic revenue and earnings
growth during the next five years. We anticipate this combination
will help us reach our annual 50% growth plan over the next 5
years. Furthermore, in addition to expanding our Home Depot and
Lowe's relationships, we look forward to the opportunity to expand
our services to Home Solutions' existing customer base." In other
news, the Company announced today it has decided to withdraw its
application with the California Department of Insurance to acquire
RAM Home Warranty. "We have determined that the time and resources
required to continue to pursue regulatory approval are not in the
best interest of our shareholders and will be better utilized
pursuing other near-term growth opportunities," said Frank
Fradella, Chairman and CEO of Home Solutions. Home Solutions is a
niche provider of specialty residential services including
Restoration Services and Specialty Interior Services. The Company
has operations in the California, Texas, and Florida markets and is
rapidly growing its core business organically as well as through
strategic acquisitions. For more information on Home Solutions,
please see our website at http://www.homcorp.com/ . Statements
included in this update that are not historical in nature are
intended to be, and are hereby identified as, "forward-looking
statements" for purposes of the safe harbor provided by Section 21E
of the Securities Exchange Act of 1934, as amended by Public Law
104-67. Forward-looking statements may be identified by words
including "anticipate," "believe," "intends," "estimates,"
"expect," and similar expressions. The Company cautions readers
that forward-looking statements including, without limitation,
those relating to the Company's future business prospects are
subject to certain risks and uncertainties that could cause actual
results to differ materially from those indicated in the
forward-looking statements, due to factors such as those relating
to economic, governmental, technological, and other risks and
factors identified from time to time in the Company's reports filed
with the SEC. CONTACT: Cormac Glynn, CEOcast, Inc. PHONE:
212-732-4300 DATASOURCE: Home Solutions of America, Inc. CONTACT:
Cormac Glynn of CEOcast, Inc., +1-212-732-4300, for Home Solutions
of America, Inc. Web site: http://www.homcorp.com/
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