Home Solutions of America Signs Letter of Intent t
Houston, TX, Apr. 7--Home Solutions of America, Inc., a niche provider of specialty residential services, announced today it has signed a letter of intent to acquire a home warranty provider for $8.5 million, net of approximately $1.5 million in excess cash currently in the business.
The acquisition candidate generates approximately $1.7 million in EBITDA and is experiencing 20% top line growth per year. This acquisition price reflects a 5.0x EBITDA multiple.
"Home warranties are quickly becoming a standard purchase for the American homeowner in both the home buying process as well as for on-going maintenance," said Frank Fradella, Chairman and CEO of Home Solutions. "With this acquisition, Home Solutions enters a marketplace that is experiencing strong top line growth from an increased number of home sales, greater penetration of home warranties included in the home sale and increased homeowner interest in home warranties for annual maintenance. Furthermore, there are compelling synergies as our existing business lines offer additional sales channels for the home warranty product. This acquisition, if it closes and receives regulatory approvals, is expected to be accretive to earnings in 2004."
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 through both an internal and an acquisition strategy.
