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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/