NEW YORK — 1847 Holdings LLC, a holding company, announced the execution of a non-binding Letter of Intent with a prospective strategic buyer to sell all assets of 1847 Cabinets Inc.

Under the terms of the LOI, the buyer has proposed an enterprise value of $27.6 million for the acquisition of all assets of 1847 Cabinets Inc. The amount, the company said in a statement, represents a 5.91x multiple of 2023 EBITDA of approximately $4.7 million.

The proposed acquisition deal is subject to negotiation and entry into a definitive purchase agreement and the satisfaction or waiver of customary closing conditions.

Ellery W. Roberts, CEO of 1847 Holdings, said, "The decision to sell 1847 Cabinets Inc. stems from our commitment to maximizing shareholder value and strategically reallocating resources to capitalize on emerging opportunities within our portfolio. While the sale represents a significant milestone, it is just one facet of our broader strategy aimed at optimizing our asset allocation and enhancing overall shareholder returns."

He added that the proceeds from the sale provide liquidity and positions the company to seize new opportunities for value creation and expansion.

"Moreover,"  said Roberts, "this proposed transaction underscores just how massively undervalued the company is relative to the sale's enterprise value. The proposed acquisition price highlights the inherent value and potential of 1847 Cabinets Inc., showing a substantial premium compared to our current market valuation. We believe this stark contrast serves as a clear indication of the market's underappreciation of the company's true worth, further underscoring the compelling investment opportunity presented by 1847."

The sale comes two months after the company announced it was going to spin 1847 Cabinets into a separate company and conduct an initial public offering of the company. 

This doesn't mean the company plans to exit the cabinetry business. On April 8, the company announced that it had delivered a non-binding Letter of Intent to acquire a large, established millwork, cabinetry, and door manufacturer based in Las Vegas. The name of the company was not released. The purchase price for this transaction is $16.75 million and is expected to be completed during the third quarter of 2024.

Other companies owned by the holding firm are Kyle's Custom Wood Shop Inc., and the High Mountain Door and Trim and Innovative Cabinet & Design divisions.

In addition to growing its base business, the company said it is strategically expanding into new, high-margin product categories. As an example, Kyle's Custom Wood Shop division recently entered the custom closet market, which Roberts said, allows the company to leverage its existing customer relationships and strong brand recognition in the market.