Capstone to Acquire Carolina Stone Products-Immediately Accretive to Revenue and EBITDA; Closing Targeted by August 22, 2025
Rhea-AI Summary
Capstone Holding Corp. (NASDAQ:CAPS) has signed a definitive agreement to acquire Carolina Stone Products for $3.9-$4.7 million, representing a 4.7×-5.2× EBITDA multiple. The acquisition, expected to close by August 22, 2025, will be immediately accretive to revenue and EBITDA.
Carolina Stone Products generates approximately $11 million in revenue and $0.75 million in LTM EBITDA, with projected 2026 EBITDA of $1.001 million. The deal marks Capstone's entry into the Southeast market and adds premium brands to its portfolio. The company reported improved Q2 performance with gross margins increasing to 24.4% from 21.4% year-over-year.
Capstone plans at least one additional acquisition by year-end 2025, targeting a ~$100 million revenue run-rate entering 2026. The company maintains a disciplined acquisition pipeline at 4-6× EBITDA valuations with 20-45% non-cash consideration.
Positive
- Immediately accretive to revenue and EBITDA upon closing
- Q2 gross margins improved to 24.4% from 21.4% year-over-year
- Strategic expansion into Southeast's fast-growing construction markets
- Clear path to ~$100 million revenue run-rate by 2026
- Disciplined acquisition strategy with favorable 4-6× EBITDA multiples
Negative
- Significant portion of purchase price (20-45%) in non-cash consideration may lead to dilution
- Integration risks associated with geographic expansion into new territory
News Market Reaction – CAPS
In the Aug 18 session, CAPS declined 8.06%, reflecting a notable negative market reaction. Argus tracked a peak move of +3.1% during that session. Argus tracked a trough of -20.8% from its starting point during tracking. Our momentum scanner triggered 6 alerts that day, indicating moderate trading interest and price volatility.
Data tracked by StockTitan Argus on the day of publication.
AI-generated analysis. How Rhea-AI works. Not financial advice.
Deal adds premium brands and North Carolina footprint; pipeline remains active at 4-6× EBITDA valuation range with 20
NEW YORK, NY / ACCESS Newswire / August 18, 2025 / Capstone Holding Corp. (NASDAQ:CAPS), a national building products distribution platform, today announced it has signed a definitive agreement to acquire Carolina Stone Products, with closing targeted by August 22, 2025, subject to customary conditions. Additional details are included in the Company's Form 8-K filed today.
Transaction Highlights
Target: Carolina Stone Products (North Carolina)
Closing: Targeted by August 22, 2025
Financials (trailing):Revenue ≈
$11 million ; LTM EBITDA ≈$0.75 million / 2026 ≈ 1.001 millionPurchase price / multiple:
$3.9 -$4.7 million (~4.7×-5.2× EBITDA)Accretion: Immediately accretive to revenue and EBITDA at close
Strategic fit: Expands Southeast footprint; adds premium brands; supports margin expansion
Management estimate of 2026 EBITDA contribution
Carolina Stone Products Acquisition - The transaction will add Carolina Stone's premium brands and loyal customer base to Capstone's portfolio. It is expected to be immediately accretive to revenue and EBITDA and will mark Capstone's entry into the Southeast, one of the nation's fastest-growing construction markets.
"With a foothold in the Carolinas, we'll begin getting Instone products on the ground right away-a key step toward share gains and margin expansion," said Matthew Lipman, CEO. "We are delivering on our 2025 plan: immediately accretive acquisitions, a disciplined pipeline at 4-6× EBITDA, and a clear path to a ~
"We couldn't be more thrilled about joining the Capstone family," added Stuart Powell, Carolina Stone
Products EVP. "We believe the additional products for our customers to access along with an ability to
serve our large, production builders in new markets via the Capstone reach will make us an even more
valuable partner."
Additional Acquisitions - Capstone expects to close at least one additional acquisition by year-end 2025. Multiple targets are under review at 4-6× EBITDA valuations, with 20
The company's disciplined approach to M&A has fueled significant platform growth. Previous acquisitions - including HHT's stone business, Heller's Stone, and Northeast Masonry - have expanded Capstone's footprint, lowered costs, strengthened supply chains, and elevated customer service.
"In building products, scale matters," Lipman added. "Larger companies enjoy competitive advantages like pricing power, operational leverage, and broader reach. Our platform and team give us the ability to capture those benefits and deliver long-term value creation."
In addition to pipeline progress, Capstone last week reported that Q2 gross margins rose to
"We're doing what we set out to do," said Lipman. "With our flexible capital structure and deep sector expertise, we're well-positioned to continue executing on our strategy in the months ahead."
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