DALLAS, Nov. 1 /PRNewswire-FirstCall/ -- Home Solutions of America,
Inc. (Nasdaq: HSOA) (the "Company" or "Home Solutions"), a provider of
recovery, restoration and rebuilding/remodeling services, announced today
that it has acquired privately-held Associated Contractors II, LLC
("Associated") for 1.5 million shares of common stock and performance-based
incentives. Although the acquisition is expected to be neutral to earnings
during the Company's 2006 fourth fiscal quarter, it is expected to be
accretive in fiscal 2007.
Associated is one of the leading contractors involved in rebuilding
Louisiana and is one of three contractors approved to participate in the
rebuilding of NASA's Stennis Space Center located in Kiln, Mississippi
under a three-year $270 million Indefinite Delivery Indefinite Quantity
contract ("ID/IQ"). Associated currently has a backlog of $22 million in
existing contracts.
Under the leadership of Scott Sewell, its Managing Partner, Associated
has worked in partnership with the Company, including working with Home
Solutions on a recently awarded contract valued at $5 million for
restoration and rebuilding services in the historic French Market of New
Orleans. The ID/IQ contract for the Stennis Space Center, just recently
underway, is expected to begin in earnest 2007. Having served in a variety
of federal executive positions as an appointee of the last four
Presidential administrations, Mr. Sewell has built extensive relationships
across the country and particularly in the region.
Under the transaction, Home Solutions issued Associated 1.5 million
shares of its restricted common stock. Associated has the ability to
receive an additional $9 million in payments based upon its collected
earnings over the next two years. Associated could also receive warrants to
purchase an additional 2 million shares of Home Solutions, exercisable at
$0.01 per share, in the event it earns $50 million in EBITDA over the next
two years.
"We believe the opportunities created by the acquisition of Associated
are compelling," said Frank J. Fradella, Chairman and CEO of Home
Solutions. "While the two companies have worked closely together this past
year, the size and scope of the projects in Louisiana and surrounding areas
has increased significantly, requiring a greater pool of skilled labor and
capital. We believe that as a result of the acquisitions of Fireline
Restoration and FERS, as well as our Louisiana-based operations Home
Solutions Restoration of Louisiana, we have the infrastructure in place to
bid and execute work on the larger, more complex projects. Associated,
through Scott Sewell's extensive relationships in the region, has a solid
backlog of work and excellent opportunities to land major contracts. We
look forward to building on our already existing relationship."
Scott Sewell, President of Associated Contractors, LLC said, "Due to
the increasing size and scope of the projects in Louisiana and surrounding
areas, we felt it necessary to join with a company that had the size and
financial resources to allow us to participate in larger projects such as
the Stennis Space Center. Home Solutions will enable us to not only execute
our existing backlog of work but also enhance the chances of winning a
significant portion of the more than $600 million in new public bid
opportunities scheduled to be awarded in the coming year. Private
reconstruction and insurance work will account for an estimated one billion
dollars of work and new construction another estimated two billion dollars.
It has become apparent that one of the key factors in garnering contracts
for major Louisiana projects in 2007 and 2008 will be the ability to
provide a skilled pool of experienced labor coupled with strong credit and
bonding facilities. Home Solutions' recent acquisition of Fireline and
their captive Louisiana subsidiary HSRLA were compelling reasons to
complete a transaction of this nature."
The Company expects to provide additional details on the transaction in
an 8-K filing with the Securities and Exchange Commission.
About Home Solutions of America, Inc.
Home Solutions of America, Inc. is a provider of recovery, restoration
and rebuilding/remodeling services to commercial and residential areas that
are (i) prone to flooding, hurricanes, tornados, fires or other naturally
occurring and repetitive weather related emergencies; and/or (ii)
experiencing robust housing development. The Company has operations in
California, Texas, Florida, Alabama, Georgia, Louisiana, Mississippi and
South Carolina. For additional information, please visit the Company's Web
site at http://www.homcorp.com .
About Associated Contractors, LLC
Associated Contractors, LLC is a Louisiana general contractor and one
of the leading construction companies helping to rebuild New Orleans in the
aftermath of Hurricane Katrina. S. Scott Sewell is the LLC's managing
partner. Mr. Sewell served in a variety of positions at the Secretarial
level as an appointee of the last four Presidents and is a resident of New
Orleans.
Cautionary Notice
Statements included in this update that are not historical in nature
are intended to be, and are hereby identified as, "forward-looking
statements" for purposes of the safe harbor provided by Section 21E of the
Securities Exchange Act of 1934, as amended by Public Law 104-67.
Forward-looking statements may be identified by words including
"anticipate," "believe," "intends," "estimates," "expect," and similar
expressions. The Company cautions readers that forward-looking statements
including, without limitation, those relating to the Company's future
business prospects, contracts to be performed, and new opportunities
associated with the anticipated rebuilding of the New Orleans area, are
subject to certain risks and uncertainties that could cause actual results
to differ materially from those indicated in the forward-looking
statements, due to factors such as those relating to economic,
governmental, technological, and other risks and factors identified from
time to time in the Company's reports filed with the SEC.
Contact: Jeff Mattich
Chief Financial Officer
(214) 623-8446
Matt Kreps
Account Manager
Halliburton Investor Relations
(972) 458-8000
| |
SOURCE Home Solutions of America, Inc.
 back to top
Related links:
http://www.HOMcorp.com
CONTACT:
Jeff Mattich, Chief Financial Officer of Home
Solutions of America, Inc., +1-214-623-8446; or Matt Kreps,
Account Manager of Halliburton Investor Relations,
+1-972-458-8000, for Home Solutions of America, Inc.
| |
|
