Acquisition Expected to Reinforce Limbach’s
Presence in Growing Midwestern Markets
Conference Call Scheduled For 8:30 AM ET on
Thursday, September 20, 2018
Limbach Holdings, Inc. (Nasdaq: LMB) (“Limbach”), a leading
national design/build mechanical, electrical and plumbing
contractor and services firm with headquarters in Pittsburgh, today
announced it has entered into a definitive agreement to acquire
Dunbar Mechanical, Inc. (“Dunbar”) from its stockholders for an
enterprise value of approximately $20.2 million.
Dunbar is a privately-owned provider of mechanical construction
services in Toledo, Ohio and the surrounding region. Dunbar
supports the maintenance and growth capital project needs of
regional industrial customers, and also provides new construction
and renovation services for customers in the education, healthcare
and general institutional markets. Dunbar’s strong local and
regional relationships with facility owners drive significant
owner-direct small project and special project work, in addition to
Dunbar’s large project capabilities. Limbach and Dunbar have
side-by-side experience working together since 2016, most notably
on one of the largest healthcare projects ever built in the Toledo
area.
The acquisition of Dunbar reinforces Limbach’s position as a
dominant mechanical services firm in the Ohio market, and provides
a substantial industrial resume from which Limbach intends to
further develop its industrial capabilities nationwide. Limbach
will further support Dunbar’s growth by leveraging its robust
corporate platform, including the design and engineering
capabilities of LEDS, Limbach Engineering & Design
Services.
On an annualized basis, Dunbar is expected to contribute revenue
of approximately $75 million initially. In addition to Dunbar’s
owner-direct work, which constitutes a significant portion of its
annual revenue with margins similar to Limbach’s service segment,
the company maintains a mechanical service division with a
significant maintenance base and revenue from associated
pull-through and spot repair work.
Subject to the terms and conditions of the purchase agreement,
Limbach has agreed to acquire Dunbar for a purchase price of $20.2
million, comprised of $4.0 million of LMB common stock, which is
approximately 402,000 shares and a $3.6 million subordinated seller
note with a two-year maturity and $12.6 million in cash, subject to
adjustment as set forth in the purchase agreement. The cash portion
of the consideration is expected to be funded through new term loan
borrowings under the Company’s existing senior credit facility.
“We are excited to announce our acquisition of Dunbar,” said
Charlie Bacon, President and CEO of Limbach. “As we have reported
previously, our focus has been heavily-weighted toward companies we
know well. Dunbar is one such example as we have successfully
partnered with it for the past two years and believe the corporate
culture there will facilitate a seamless transition. In addition to
knowing the business over this period of time, the acquisition of
Dunbar’s resume of industrial projects brings us a much stronger
presence in the expanding industrial and manufacturing sector, a
sector which is experiencing significant growth driven by a
favorable energy environment and tax environment following the
passage of the Tax Cuts and Jobs Act legislation in December of
2017.”
Mr. Bacon continued, “Dunbar is a family business with a
sterling reputation. Among the many aspects of the acquisition that
excite me, I am very pleased to note that Erik Dunbar, a
third-generation Dunbar family member, will stay with us to run the
business unit along with his team of excellent, long-tenured
executives and a terrific group of staff members that have made the
Dunbar business successful. We look forward to welcoming the new
members of our Limbach family.”
The transaction is subject to customary closing conditions,
including a condition that Limbach secures the requisite debt
financing, and is expected to close within 60 days.
Conference Call Details
Date: Thursday, September 20, 2018 Time: 8:30 a.m.
Eastern Time Participant Dial-In Numbers: Domestic callers:
(866) 604-1698 International callers: (201) 389-0844
Access by Webcast
The call will also be simultaneously webcast over the Internet
via the “Investor Relations” section of LMB’s website at
www.limbachinc.com or by clicking on the conference call link:
Limbach - Dunbar Acquisition Conference Call. An audio replay of
the call will be archived on the Company’s website for 365
days.
About Limbach
Founded in 1901, Limbach is the 10th largest mechanical systems
solutions firm in the United States in 2017 as determined by
Engineering News Record. Limbach provides building infrastructure
services, with an expertise in the design, installation and
maintenance of HVAC and mechanical, electrical, and plumbing
systems for a diversified group of commercial and institutional
building owners. Limbach employs more than 1,500 employees in 14
offices throughout the United States. Limbach’s full life-cycle
capabilities, from concept design and engineering through system
commissioning and recurring 24/7 service and maintenance, position
Limbach as a value-added and essential partner for building owners,
construction managers, general contractors and energy service
companies.
Forward-Looking
Statements
We make forward-looking statements in this press release within
the meaning of the Private Securities Litigation Reform Act of
1995. These forward-looking statements relate to expectations or
forecasts for future events, including, without limitation, our
future financial or business performance or strategies, results of
operations or financial condition. These statements may be preceded
by, followed by or include the words “may,” “might,” “will,” “will
likely result,” “should,” “estimate,” “plan,” “project,”
“forecast,” “intend,” “expect,” “anticipate,” “believe,” “seek,”
“continue,” “target” or similar expressions. These forward-looking
statements are based on information available to us as of the date
they were made and involve a number of risks and uncertainties
which may cause them to turn out to be wrong. These risks include,
among others, our inability to complete the proposed acquisition
due to, among other things, inability to secure the requisite
financing, and our inability to recognize the anticipated benefits
of the proposed acquisition. Accordingly, forward-looking
statements should not be relied upon as representing our views as
of any subsequent date, and we do not undertake any obligation to
update forward-looking statements to reflect events or
circumstances after the date they were made, whether as a result of
new information, future events or otherwise, except as may be
required under applicable securities laws. As a result of a number
of known and unknown risks and uncertainties, our actual results or
performance may be materially different from those expressed or
implied by these forward-looking statements. Please refer to our
most recent annual report on Form 10-K, which is available on the
SEC’s website (www.sec.gov), for a full discussion of the risks and
other factors that may impact any forward-looking statements in
this press release.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20180919005774/en/
Investor Relations:The Equity Group Inc.Jeremy Hellman,
CFASenior Associate(212) 836-9626jhellman@equityny.comorLimbach
Holdings, Inc.John T. Jordan, Jr.Executive Vice President and Chief
Financial Officer(301) 623-4799john.jordan@limbachinc.com
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