$6M acquisition structured with majority seller financing tied to performance;
company expects to complete transaction without shareholder dilution
NEW YORK, March 06, 2026 (GLOBE NEWSWIRE) -- 1847 Holdings LLC (OTC: LBRA) ("1847" or the "Company"), a diversified acquisition holding company focused on identifying and monetizing overlooked, deep-value businesses, today announced that it has executed a non-binding Letter of Intent ("LOI") to acquire a specialty wood framing and carpentry contractor with more than 40 years of operating history in the Southern California construction market (the "Target"). The Target provides residential wood framing, commercial light framing, and custom carpentry services across Southern California.
The proposed acquisition is consistent with 1847's strategy of acquiring established lower-middle-market businesses at attractive valuations and improving operational performance to drive long-term shareholder value. For the three fiscal years ended December 31, 2024, the Target generated average unaudited annual revenue of approximately $19 million and average unaudited adjusted operating income of approximately $1.7 million. In 2025, the Target intentionally declined several lower-margin project opportunities to protect profitability and brand positioning, resulting in a temporary decline in revenue and a reported unaudited operating loss of approximately $1.2 million for the year.
Following this strategic reset, the Target has secured approximately $29 million in new contract awards, providing strong forward revenue visibility that the Company believes positions the Target for a return to profitability. The $29 million backlog represents more than 1.5x the Target's historical annual revenue. The Target holds all required California Contractors State License Board (CSLB) Class B General Building and specialty framing licenses, and key management and field leadership are expected to remain with the business following closing.
Under the terms of the LOI, 1847 has agreed to acquire all of the issued and outstanding equity securities of the Target for an aggregate purchase price of $6,000,000, structured as $1,000,000 in cash payable at closing and a $5,000,000 seller-financed contingent promissory note. The seller-financed note bears interest at 6% annually and is tied directly to the Target's future operating performance, with vesting based on GAAP operating income achieved during either fiscal year 2026 or 2027. Up to 100% of the note will vest only if the Target generates GAAP operating income of $2.65 million or greater in the selected measurement year.
Based on the Target's average operating income of approximately $1.7 million in the three fiscal years prior to 2025, the acquisition implies a valuation of roughly 3.5x operating income.
Importantly, the transaction structure significantly limits upfront capital risk for 1847. With the vast majority of the purchase price seller financed and tied to future performance, the Company is effectively committing only a modest amount of capital at closing while aligning the sellers' financial outcome with the long-term success of the business.
The transaction is expected to be completed on a cash-free, debt-free basis, subject to customary net working capital adjustments.
1847 has initiated discussions with financing sources to fund the cash portion of the acquisition on a non-dilutive basis. Based on these discussions, the Company believes the transaction can be completed without issuing additional common equity, preserving value for existing shareholders.
Ellery W. Roberts, CEO of 1847 Holdings, commented, "This transaction represents exactly the type of opportunity our acquisition strategy is designed to identify - a long-established operating business with strong market positioning that experienced a temporary disruption, which allowed us to negotiate an attractive acquisition price. With more than four decades of operating history and approximately $29 million of newly secured contracts, we believe this business is positioned for a return to strong operating performance.
"Importantly, the structure of this transaction is highly shareholder-friendly. The majority of the purchase price is seller financed and tied directly to future operating performance, which aligns incentives and significantly limits the capital we plan to commit upfront. In addition, we believe we can fund the cash portion of the acquisition through non-dilutive financing sources, allowing us to complete the transaction without issuing additional equity. We believe this acquisition has the potential to generate significant long-term value for our shareholders."
The LOI is non-binding and the proposed transaction remains subject to completion of due diligence, negotiation of definitive agreements and customary closing conditions.
About 1847 Holdings LLC
1847 Holdings LLC (OTC: LBRA), a 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.
For the latest insights, follow 1847 on Twitter.
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.
Contact:
Crescendo Communications, LLC
Tel: +1 (212) 671-1020
Email: LBRA@crescendo-ir.com
