Capstone Secures $3.25 Million to Advance $15M Accretive Acquisition; Accelerates Progress Toward $100M Revenue Run-Rate
Rhea-AI Summary
Capstone Holding Corp (NASDAQ:CAPS) announced a $3.25 million draw under its existing $10.0 million convertible note facility to support a signed LOI to acquire a multi-location stone distributor with ~$15 million in annual revenue. The company said the acquisition is expected to be immediately accretive to revenue and EBITDA and that the financing accelerates progress toward a $100 million revenue run-rate target in Q1 2026.
Key economic terms disclosed include a $1.10 fixed conversion price, 7.0% annual interest, an 8.34% original issue discount, quarterly cash amortization beginning after 90 days, and a maturity date of July 29, 2026. Full details will appear in the company 8-K filing.
Positive
- $3.25M immediate cash draw to fund acquisition
- Target acquisition adds ~$15M annual revenue
- Transaction expected to be immediately accretive to EBITDA
- Advances goal to reach $100M revenue run-rate by Q1 2026
- Facility preserves balance-sheet flexibility for further deals
Negative
- Convertible facility carries an 8.34% original issue discount
- Facility bears 7.0% annual interest and quarterly amortization
- Convertible notes mature on July 29, 2026, creating near-term refinancing risk
- Conversion price of $1.10 could dilute existing shareholders upon conversion
News Market Reaction 14 Alerts
On the day this news was published, CAPS declined 5.41%, reflecting a notable negative market reaction. Argus tracked a peak move of +11.7% during that session. Argus tracked a trough of -19.2% from its starting point during tracking. Our momentum scanner triggered 14 alerts that day, indicating notable trading interest and price volatility. This price movement removed approximately $502K from the company's valuation, bringing the market cap to $9M at that time.
Data tracked by StockTitan Argus on the day of publication.
Follow-on draw affirms investor support for Capstone's growth strategy and reflects the company's disciplined approach to financing accretive acquisitions.
NEW YORK, NY / ACCESS Newswire / October 27, 2025 / Capstone Holding Corp. (NASDAQ:CAPS), a national building products distribution platform, today announced a
This financing underscores strong ongoing investor support and confidence in the company's growth strategy. It also accelerates Capstone's momentum as the company advances toward its
Key Highlights:
Funding:
$3.25 million cash draw under Capstone's existing$10 million convertible note facility.Terms: Quarterly cash amortization beginning after 90 days;
$1.10 fixed conversion price.Flexible Capital: Strengthens Capstone's ability to move decisively on high-quality, accretive acquisitions while preserving balance-sheet strength and flexibility.
Disciplined Financing: Demonstrates Capstone's commitment to prudent, structured capital deployment focused on long-term value creation.
Investor Partnership: Reinforces deep institutional investor confidence in Capstone's M&A strategy and growth trajectory.
Acquisition Momentum: Advances execution of the recently announced LOI to acquire an approximately
$15 million multi-location stone distributor.
"Our investors continue to validate Capstone's disciplined M&A strategy, growth trajectory, and proven track record of execution," said Matthew Lipman, CEO of Capstone Holding Corp. "This funding allows us to move quickly when the right opportunity arises while preserving our flexibility and balance-sheet strength."
Capstone's disciplined approach to accessing capital has enabled four revenue- and EBITDA-accretive acquisitions to date, while driving record revenue and gross margin expansion this year. As the company continues to pursue acquisitions at attractive valuations, it has also reaffirmed its goal of reaching a
Key terms of the facility include an original issue discount of
Joseph Gunnar & Co., LLC acted as the exclusive placement agent for this offering.
About Capstone Holding Corp.
Capstone Holding Corp. (NASDAQ: CAPS) is a diversified platform of building products businesses focused on distribution, brand ownership, and acquisition. Through its Instone subsidiary, Capstone serves 31 U.S. states, offering proprietary stone veneer, hardscape materials, and modular masonry systems. The company's strategy combines disciplined M&A, operational efficiency, and a growing portfolio of owned brands to build a scalable and durable platform.
Investor Contact
Investor Relations
Capstone Holding Corp.
investors@capstoneholdingcorp.com
www.capstoneholdingcorp.com
Forward-Looking Statements
This press release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These statements relate to future events and performance, including guidance regarding revenue and EBITDA targets, M&A strategy, use of capital, and operating outlook. Actual results may differ materially from those projected due to a range of factors, including but not limited to acquisition timing, macroeconomic conditions, and execution risks. Please review the Company's filings with the SEC for a full discussion of risk factors. Capstone undertakes no obligation to revise forward-looking statements except as required by law.
SOURCE: Capstone Holding Corp.
View the original press release on ACCESS Newswire
FAQ
How much did Capstone (CAPS) draw from its convertible note facility on October 27, 2025?
What acquisition is the CAPS funding intended to support and how large is it?
What are the key economic terms of the convertible note draw for CAPS?
Will the planned acquisition affect Capstone's revenue targets for 2026 (CAPS)?
Where will investors find the full legal and financial details of the CAPS financing?
