Select Interior Concepts to Sell Its RDS Segment to Interior Logic Group for $215 Million
$215 millionpurchase price provides attractive valuation for RDS and to shareholders
- Transforms balance sheet to debt-free, strong net cash position providing significant financial flexibility
- Concentrates efforts on maximizing value in the stone and tile distribution market and expands margin profile
For the year ended
“When I joined SIC last June, I promised that my highest priority would be to focus on building shareholder value and this transaction is a significant accomplishment towards that objective,” said Chief Executive Officer Bill Varner. “It unlocks significant value for SIC shareholders and provides us with a clean balance sheet to focus our management on further building shareholder value with our remaining high-margin, fast growing ASG segment. As a leading provider of interior finish and design solutions for the single-family homebuilding market, ILG is a natural fit for RDS’ customers, partners, and employees. The RDS team has done a terrific job of driving growth and operational improvements, and we are confident that they will continue to thrive as part of the ILG team.”
“We are very excited to continue executing upon our plans for strategic growth, and to welcome the RDS organization to ILG. This acquisition helps ILG to accelerate its growth in key markets, and to deliver greater value to our customers. We will continue distinguishing ourselves by our innovative technology and commitment to grow with our customers through trusted partnerships and relationships,” said Chief Executive Officer
Upon closing of the transaction, the Company expects full year Adjusted EBITDA of
1 Please see the included financial table for a reconciliation of Residential Design Services Adjusted EBITDA, a non-GAAP financial measure, to a comparable GAAP financial measure.
CONFERENCE CALL AND WEBCAST DETAILS
The Company will host a conference call today at
ILG is a leading, data-driven and technology-enabled provider of interior design, supply chain and installation management solutions to several of the nation’s largest single-family homebuilders. The company delivers to homebuilders and prospective homeowners critical information and support during the journey of moving into a new home, and utilizes technology, data, design expertise and supplier relationships to help enable buyers to complete their home purchases. ILG operates across 37 states, providing its capabilities to help enable the completion of nearly 100,000 homes per year.
This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and, as such, may involve known and unknown risks, uncertainties and assumptions. Forward-looking statements may include, but are not limited to, statements relating to timing for completion of the proposed transaction and our 2021 Adjusted EBITDA outlook. Forward-looking statements may be identified by the use of words such as “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “expect,” “predict,” “project,” “forecast,” “potential,” “continue,” and other forms of these words or similar words or expressions or the negatives thereof. Forward-looking statements are based on historical information available at the time the statements are made and are based on management’s reasonable belief or expectations with respect to future events. Forward-looking statements are subject to risks, uncertainties, and other factors, including, but not limited to, those factors contained in our most recent Annual Report on Form 10-K (our “Annual Report”) and the other reports we file with the
USE OF NON-GAAP FINANCIAL MEASURES
This press release and the schedules hereto include Adjusted EBITDA for the RDS segment, which is a financial measure that has not been calculated in accordance with accounting principles generally accepted in
This press release also includes a forward-looking full year Adjusted EBITDA outlook. A reconciliation for the forward-looking full-year 2021 Adjusted EBITDA outlook is not being provided, as we do not currently have sufficient data to accurately estimate the variables and individual adjustments for such reconciliation. Our management cannot estimate on a forward-looking basis without unreasonable effort the impact these variables and individual adjustments will have on its reported net income and its reported effective tax rate because these items, which could be significant, are difficult to predict and may be highly variable.
We believe that this non-GAAP financial measure provides valuable information regarding our earnings and business trends by excluding specific items that we believe are not indicative of the ongoing operating results of our businesses, providing a useful way for investors to make a comparison of our performance over time and against other companies in our industry.
We have provided this non-GAAP financial measure as supplemental information to our GAAP financial measures and believe this non-GAAP measure provides investors with additional meaningful financial information regarding our operating performance and cash flows. Our management and board of directors also use this non-GAAP measure as a supplemental measure to evaluate our businesses and the performance of management, including the determination of performance-based compensation, to make operating and strategic decisions, and to allocate financial resources. We believe this non-GAAP measure also provides meaningful information for investors and securities analysts to evaluate our historical and prospective financial performance. This non-GAAP measure should not be considered a substitute for or superior to GAAP results. Furthermore, the non-GAAP measure presented by us may not be comparable to similarly titled measures of other companies.
Reconciliation of RDS Income From Operations to Adjusted EBITDA (unaudited). The following table represents a reconciliation of Residential Design Services income from operations (loss), a comparable financial measure as measured in accordance with GAAP, to Adjusted EBITDA for the twelve months ending
|Twelve Months Ended|
|Income from operations||$||1,615||$||3,295|
|Depreciation and amortization||11,578||11,624|
|Acquisition and integration related costs||$||1,318||$||2,138|
|Employee related reorganization costs||1,025||1,003|
|New branch startup costs||-||5|
|Other non-operating costs||53||53|
|Facility closures and divestitures||1,033||1,469|
|Integration and savings initiatives costs||788||810|
Adjusted EBITDA is defined as income from operations (loss) before depreciation and amortization , equity-based compensation expense and other costs that are deemed to be transitional in nature or not related to our core operations, including employee related reorganization costs, acquisition and integration related costs, other non-recurring costs, integration and savings initiatives costs, facility closures and divestitures, legal settlements, and other non-operating costs but after other income (expense).
Source: Select Interior Concepts, Inc.