1847 Holdings LLC Announces $11.42 Million Private Placement to Fund the Planned Acquisition of a Millwork, Cabinetry, and Door Manufacturer

Rhea-AI Summary

1847 Holdings (NYSE American: EFSH) has announced a $11.42 million private placement to fund the acquisition of a Las Vegas-based millwork, cabinetry, and door manufacturer. The target company reported unaudited revenue of $33.1 million and net income of $10.4 million for the trailing twelve months ended September 30, 2024.

The private placement consists of 42,311,118 units, each including one common share or pre-funded warrant ($0.01 exercise price), one series A warrant ($0.81 exercise price), and one series B warrant ($0.54 exercise price). Spartan Capital Securities is serving as the sole placement agent.

Positive

• Target acquisition company shows strong financials with $33.1M revenue and $10.4M net income
• Successfully secured $11.42M funding for acquisition
• Acquisition closing reported as imminent

Negative

• Significant shareholder dilution through issuance of 42.3M units
• Additional dilution potential from multiple warrant series
• Securities being issued are unregistered, limiting immediate tradability

Insights

Financial Analyst

This $11.42M private placement marks a strategic move for 1847 Holdings to acquire a profitable millwork manufacturer. The target company's impressive financials - $33.1M in revenue and $10.4M in net income - suggest a potentially accretive acquisition with a healthy 31.4% net margin. The deal structure, involving common shares and two series of warrants, provides flexibility but indicates significant dilution potential. With EFSH's current market cap of just $4.5M, this transaction represents a transformative acquisition that could substantially alter the company's financial profile. However, the warrant exercise prices at $0.81 and $0.54 compared to current trading levels suggest complex implications for share price dynamics.

M&A Specialist

The acquisition structure reveals interesting dynamics. The target's valuation metrics appear favorable given its strong profitability, though the exact purchase price isn't disclosed. The private placement's complex structure with pre-funded warrants and two warrant series suggests sophisticated financial engineering to make the deal viable. For a micro-cap company to acquire a business generating over $33M in revenue represents a bold move that could either be transformative or risky depending on integration execution. The immediate dilution from the unit offering, combined with potential future dilution from warrants, requires careful consideration of the long-term value proposition versus short-term shareholder impact.

NEW YORK, NY / ACCESSWIRE / December 13, 2024 / 1847 Holdings LLC (NYSE American:EFSH) ("1847 Holdings" or the "Company"), a holding company specializing in identifying over-looked, deep value investment opportunities in middle market businesses, announced today a private placement for gross proceeds of $11.42 million, prior to deducting placement agent fees and other expenses payable by the Company.

The proceeds from the private placement are exclusively intended to fund the previously announced planned acquisition of a millwork, cabinetry, and door manufacturer. As previously reported, the millwork, cabinetry, and door manufacturer, based in Las Vegas, Nevada, had unaudited revenue of $33.1 million and net income of $10.4 million for the trailing twelve months ended September 30, 2024. The acquisition is expected to close imminently, with final steps underway.

The private placement consists of 42,311,118 units consisting of (i) one common share and/or a pre-funded warrant to purchase one common share at an exercise price of $0.01, (ii) one series A warrant to purchase one common share at an exercise price of $0.81 (subject to adjustments), and (iii) one series B warrant to purchase one common share at an exercise price of $0.54 (subject to adjustments). Additional details on the transaction will be available in the Company's Form 8-K, which will be filed with the U.S. Securities and Exchange Commission and available at www.sec.gov.

Spartan Capital Securities, LLC is acting as the sole placement agent in connection with the offering.

The common shares, and the common shares issuable upon the conversion of the pre-funded warrants, the series A warrants, and the series B warrants have not been registered under the Securities Act of 1933, as amended, or any state securities laws and, until so registered, may not be offered or sold in the United States or any state absent registration or an applicable exemption from registration requirements.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About 1847 Holdings

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.

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: EFSH@crescendo-ir.com

SOURCE: 1847 Holdings LLC

View the original press release on accesswire.com

FAQ

What is the value of the private placement announced by EFSH?

1847 Holdings (EFSH) announced a private placement for gross proceeds of $11.42 million, before deducting placement agent fees and other expenses.

What are the financial metrics of the company EFSH plans to acquire?

The target company, a Las Vegas-based manufacturer, reported unaudited revenue of $33.1 million and net income of $10.4 million for the trailing twelve months ended September 30, 2024.

How many units are being issued in EFSH's private placement?

The private placement consists of 42,311,118 units, each including common shares or pre-funded warrants, plus series A and B warrants.

What are the exercise prices for the warrants in EFSH's private placement?

The pre-funded warrants have an exercise price of $0.01, series A warrants at $0.81, and series B warrants at $0.54, subject to adjustments.