December 2, 2022 | Bill Esler
Kyle’s Custom Wood Shop was a successful business generating more than $4 million in revenue in 2020 supplying builders in the fast-growing Boise, ID market.
After it caught the eye of equity investors 1847 Holdings—which acquired it in October of that year—the business grew even faster, becoming the anchor for two additional investments: Innovative Cabinets & Design and High Mountain Door & Trim, both in Reno, NV. These formed the basis of a new subsidiary, 1847 Cabinets, Inc., with $32 million in revenue following their acquisition in October 2021.
Interest in cabinetry businesses among investors remains strong, even as the business eases up from its recent torrid growth rates. Countertop and cabinetry purveyor K.G. Stevens, operating a 150,000-sq.-ft. plant in Milwaukee, was acquired in October 2022 by Borgman Capital. And stock investors will be able to take shares in the MasterBrand Cabinets, Inc., as the largest U.S. cabinet company goes public on the New York Stock Exchange this month.
The newly acquired cabinetry businesses are performing well for 1847 Holdings—also listed on the New York Stock Exchange— which reported quarterly revenues from what it terms its “construction segment” of $8.7 million, up more than 650 percent through September 30, 2022 due to these deals.
“We believe our significantly larger operating base can serve as a platform from which we continue building a regionally dominant provider of cabinets to homebuilders in the Southwest, West and Pacific Northwest,” says Ken Yuan, named CEO at Kyle’s Custom after it was acquired.
Investor interest in the kitchen cabinetry market is encouraged by longer term prospects for home building and remodeling, once interest rates fall. Housing inventory overall is near “historic lows,” according to Lawrence Yun, chief economist for the National Association of Realtors. Once buyers can access affordable mortgage rates, watch for another boom.
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