ATLANTA, May 09, 2021 (GLOBE NEWSWIRE) — Select Interior Concepts, Inc. (NASDAQ: SIC), a premier installer and distributor of interior building products, today announced that it has entered into a definitive agreement to sell its Residential Design Services segment in an all-cash transaction to Interior Logic Group, a portfolio company of Blackstone. The transaction is valued at approximately $215 million, subject to customary purchase price adjustments, and is expected to close mid-2021, subject to customary closing conditions which includes the receipt of required regulatory approvals. SIC intends to use the proceeds from the transaction to repay all its outstanding indebtedness and capital lease obligations.
For the year ended December 31st, 2020, SIC reported RDS segment revenue of $332.5 million, and RDS’ segment Adjusted EBITDA of $16.7 million representing 12.8x purchase price to 2020 Adjusted EBITDA. For the 12 months ended March 31, 2021, SIC reported RDS segment revenue of $333.5 million; RDS’ segment Adjusted EBITDA was approximately $19.0 million representing 11.3x purchase price to LTM Adjusted EBITDA.1
“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 Alan Davenport of Interior Logic Group.
2021 Outlook
Upon closing of the transaction, the Company expects full year Adjusted EBITDA of $31 million to $33 million, which excludes RDS’ impact for the year. We expect our total margin profile to improve meaningfully while our capital expenditures requirements decline materially.
RBC Capital Markets, LLC and Truist Securities, Inc. served as financial advisors to SIC and Alston & Bird LLP served as legal advisor to SIC on this transaction.
Goldman Sachs & Co. LLC served as exclusive financial advisor, and Kirkland & Ellis LLP served as legal advisor to Blackstone and ILG on this transaction.
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.
ABOUT SELECT INTERIOR CONCEPTS
Select Interior Concepts is a premier installer and distributor of interior building products with leading market positions in highly attractive markets. Headquartered in Atlanta, Georgia, Select Interior Concepts is listed on the NASDAQ. The Residential Design Services segment provides integrated design, sourcing and installation solutions to customers, in the selection of a broad array of interior products and finishes, including flooring, cabinets, countertops, and related interior items. The Architectural Surfaces Group segment distributes natural and engineered stone through a national network of distribution centers and showrooms under proprietary brand names such as PentalQuartz and MetroQuartz. For more information, visit: www.selectinteriorconcepts.com.
ABOUT INTERIOR LOGIC GROUP
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.
