Bed Bath & Beyond acquiring two home services companies
Bed Bath & Beyond Inc. continues to reinvent itself as an “Everything Home Company.”
The company, whose portfolio includes Bed Bath & Beyond, The Container Store, Kirkland’s, Overstock and BuyBuy Baby is expanding its dedicated home services platform, Beyond Home Services, through the acquisition of two Detroit-based companies. The acquisitions include Installed Right, which specializes in the professional installation of products and systems such as closets and storage systems, flooring, lighting, cabinets, kitchens and more.
In addition, Bed Bath & Beyond is acquiring SFV Services, which provides renovation, construction, demolition, facilities and project management services across residential and commercial markets. Both companies are founded and led by Mitch Rosen and his family. The transaction is expected to close by the end of June.
The acquisition comes as Bed Bath & Beyond and The Container Store recently opened their first co-branded location in Fort Worth, Texas. The new store concept combines The Container Store’s organizing solutions, design services and expertise with Bed Bath & Beyond’s home essentials, resulting in a “more complete home destination” for consumers.
Bed Bath & Beyond’s home services platform is focused on installation, renovation, construction, project management, maintenance and related homeowner services. It is designed to complement the company’s merchandising and homeownership businesses while creating deeper customer relationships, recurring revenue opportunities and differentiated capabilities that extend beyond traditional retail, according to Bed Bath & Beyond.
The integration of Installed Right and SFV Services adds installation, renovation, construction and project-execution capabilities that further differentiate Bed Bath & Beyond from traditional retailers, the company added.
[READ MORE: Bed Bath & Beyond parent acquires Lumber Liquidators for $150 million]
Marcus Lemonis, executive chairman and CEO of Bed Bath & Beyond, said acquisitions are not only about adding revenue or EBITDA, “they are about acquiring capabilities that make our platforms and Everything Home ecosystem more valuable."
“We are particularly excited to welcome the Rosen family as long-term shareholders and partners,” Lemonis added. “We found a business with a long history of performance, a reputation for consistency, and a founder-led culture that understands what it takes to operate successfully on a national scale. We were able to evaluate years of real-world execution through longstanding relationships with companies like Lumber Liquidators and Cabinets To Go, and saw both strong customer reviews and durable financial results.”
Lemonis added that the experience of Installed Right and SRV Services in executing store remodels, fixture installations and retail construction projects also supports Bed Bath & Beyond’s capital-light store conversion strategy, “providing additional expertise as we continue expanding and refining our physical footprint.”
“The home services market remains highly fragmented, and we believe there is a significant opportunity to continue consolidating complementary businesses under the Beyond Home Services banner,” he added.
Transaction details
Under the agreed upon terms, Bed Bath & Beyond will acquire Installed Right and SFV Services in a transaction consisting entirely of Bed Bath & Beyond common stock. The acquired businesses generated approximately $60 million in combined revenue and approximately $5 million in adjusted EBITDA during the most recently completed fiscal year.
As consideration for the transaction, Bed Bath & Beyond will issue approximately 7.2 million shares of common stock to the sellers, aligning the interests of the Rosen family and management team with the long-term success of the company and its shareholders. By accepting stock consideration, the Rosen family has elected to become long-term shareholders in Bed Bath & Beyond and participate in the future growth of Beyond Home Services.
