- 1847 Holdings announces sale of largest portfolio operation $65 million in cash, representing sales multiples of 1.6 times revenue and 7.5 times operating income as reported.
- Proceeds from sale of CMD will be used for debt pay-off and future acquisitions.
- Pending acquisition of specialty construction operation in southern California will require $6.0 million in cash over the next three years.
- Specialty construction target is priced at a compelling valuation multiple of 2.2 times sales.
- Both transactions are expected to close sometime in the third quarter 2026.
- The deals mean a major transformation in the Company’s financial reports with deleveraged balance sheet and significant excess cash. Quarterly revenue will be substantially lower and there is a possibility of a net operating loss in the near-term.
Divestiture to Transform Balance Sheet
Leadership of 1847 Holdings (LBRA: OTC/ID) apparently received an offer that could not be refused for its portfolio holding CMD, Inc. Mid-April 2026, the Company announced an all-cash offer of$65 million for producer of cabinetry and millwork for residential and commercial structures. Although unnamed, the buyer has strategic interests in the sector and is funded by a private equity fund.
After the sale is consummated, the divestiture of CMD will be well noticeable in financial results. It is the largest of 1847 Holdings portfolio positions, contributing $40.5 million to the Company’s top-line and $8.7 million to operating income in the full year 2025. None of the three operations that will remain in the portfolio were profitable in 2025.
Nonetheless, management could not resist an offer 1.6 times revenue and 7.5 times operating income as reported in 2025. Clearly CDM has value far greater to a strategic buyer than has been recognized by investors in LBRA stock. The shares trade at 0.24 times sales.
Management has already declared an intention to pay off all debt with proceeds from the deal. At the end of December 2025, 1847 Holdings had approximately $29.2 million in notes payable on its balance sheet. The remaining proceeds near $35 million would be a meaningful contribution to future investments.
Proposed Acquisition
Indeed, 1847 Holdings is already pursuing an acquisition of a specialty construction operation based in California. The Company has offered $6.0 million for the operation – $1.0 million in cash up front and $5.0 million in the form of a contingent promissory note. For the seller to receive the full $6.0 million, the operations must generate $2.65 million in operating income in 2026 or 2027.
The proposed acquisition could add as much as $20 million to 1847 Holdings revenue in the first twelve months. The operation reported $19 million in the full year 2024, but experienced a pull back in sales in 2025, de to a restructuring plan. Things are looking up as a consequence of these changes. The operation has collected a backlog near $29 million.
Summary
1847 Holdings has pledged to pay approximately 2.2 times anticipated annual revenue for the specialty construction operation. Granted this is greater than the price-to-sales multiple bestowed by traders on LBRA shares. Nonetheless, management has proven with the sale of CMD, Inc. that the team has the formula to divest operations at higher multiples than paid at acquisition and, yes, higher than its own valuation in the public market.
Additional commentary can be found in an earlier post at LBRA: New Stock Symbol as Acquisiton Portfolio Expands
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