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NEW YORK - Capstone Holding Corp. (NASDAQ:CAPS), a $6.64 million market cap company currently generating $43.38 million in annual revenue, has signed a non-binding letter of intent to acquire a multi-location stone distribution business with $15 million in annual revenue, the company announced in a press release Tuesday. According to InvestingPro data, the company is currently trading below its Fair Value, suggesting potential upside opportunity.
The acquisition, expected to close within 45 days pending a definitive agreement and customary conditions, would be purchased at approximately Net Asset Value with about half of the consideration in notes or contingent consideration.
Capstone stated the planned acquisition would immediately contribute to both revenue and EBITDA, advancing the company toward its target of achieving $100 million in run-rate revenue by early 2026.
"This LOI represents exactly the type of disciplined, growth-accelerating acquisition we seek," said Matt Lipman, CEO of Capstone Holding Corp. "It brings immediate revenue and EBITDA to our platform and moves us further toward our $100M run-rate revenue goal while expanding our customer base and geographic reach."
According to the company, the acquisition would expand Capstone’s geographic footprint and add premium brands to its portfolio. The company compared the valuation to its previous acquisition of NEM, which it described as "a big financial and strategic win."
Capstone, through its Instone subsidiary, currently serves 31 U.S. states, offering stone veneer, hardscape materials, and modular masonry systems.
The letter of intent remains non-binding, and completion of the transaction depends on negotiation of final terms and satisfaction of closing conditions. Trading at just 0.25 times book value, Capstone’s stock has shown high price volatility, as revealed by InvestingPro analysis, which offers 8 additional key insights about the company’s financial position and market performance.
In other recent news, Capstone Holding Corp. has made significant strides in its strategic operations. The company announced the completion of its acquisition of Carolina Stone Products ahead of schedule, purchasing the North Carolina-based company for between $3.9 million and $4.7 million. This acquisition represents approximately 4.7 to 5.2 times Carolina Stone’s trailing twelve-month EBITDA of $0.75 million and has already been fully integrated, adding $11 million in revenue and expanding Capstone’s presence in Southeast markets. Furthermore, Capstone has exchanged $1.9 million of debt for newly issued non-convertible preferred equity, a move expected to reduce its 2026 interest expense by over $170,000 without issuing new common shares.
The company is also actively pursuing additional acquisition opportunities, maintaining a focus on transactions that align with its strategic goals and provide immediate financial benefits. These developments come as part of Capstone’s disciplined approach to mergers and acquisitions. The company has stated that its current M&A pipeline is active, following the successful integration of Carolina Stone. These actions reflect Capstone’s ongoing efforts to enhance its financial position and strategic market presence.
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