Capstone Holding Corp. announced the purchase of a multi‑location stone distributor that generated $15 million in annual revenue, with the transaction expected to close on December 15, 2025. The acquisition is designed to add immediate revenue and EBITDA to Capstone’s platform and bring the company closer to its $100 million run‑rate goal for 2026.
The deal is projected to be accretive to both revenue and EBITDA in the first quarter after closing. Gross margin expansion in Q2 2025 to 24.4% from 21.4% year‑over‑year reflects disciplined cost management and a favorable mix of owned‑brand sales, which the acquisition is expected to reinforce. The new distributor’s product lines and dealer network complement Capstone’s technology‑enabled distribution model, creating synergies that should lift margin performance further.
Capstone’s Q2 2025 revenue slipped slightly to $12.85 million from $12.89 million in the same quarter of 2024, a 0.3% decline. The modest drop is attributed to seasonal demand fluctuations in the stone market, while the company’s gross margin expansion offsets the revenue dip. The acquisition adds a $15 million revenue stream that will help offset the Q2 decline and support a stronger top‑line trajectory.
Financing for the transaction comes from a $10 million convertible note facility, of which $3.25 million has been drawn. The purchase price is near net asset value, with roughly 50% of the consideration in notes or contingent consideration, indicating a conservative valuation approach. The strategic fit is reinforced by Capstone’s recent acquisition of Carolina Stone Products, which closed on August 22, 2025 and added $11 million in revenue, demonstrating the company’s disciplined M&A execution in the stone category, which is projected to grow at a 4.1% CAGR over the next five years.
CEO Matt Lipman said the deal “brings another disciplined, accretive acquisition to the platform and strengthens our position in a high‑growth category.” Market analysts noted the positive reaction to the announcement, citing the immediate accretive nature of the deal, the reaffirmation of the $100 million run‑rate target, and the record gross‑margin expansion as key drivers of investor enthusiasm.
The acquisition positions Capstone to accelerate its 2026 growth plan, adding a $15 million revenue stream and reinforcing its margin expansion trajectory. With the new distributor’s dealer network and product mix, Capstone is better positioned to capture the growing demand for stone products and to achieve the targeted run‑rate while maintaining disciplined cost control and strategic financing.
The content on BeyondSPX is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.