Limbach Holdings Acquires Kent Island Mechanical
September 03 2024 - 9:15AM
Business Wire
A leading provider of building systems
solutions in the Greater Washington, D.C. metro region
Limbach Holdings, Inc. (Nasdaq: LMB) ("Limbach" or the
"Company"), a building systems solutions firm that partners with
building owners and facilities managers who have mission critical
mechanical, electrical and plumbing infrastructure, today announced
that it has acquired Kent Island Mechanical, LLC (“KIM”) for an
initial purchase price of $15 million. Based in Laurel, Maryland
and serving the Greater Washington, D.C. metro region, KIM is a
leading service provider to facility owners who require solutions
for maintaining complex building systems.
Transaction Highlights
- The acquisition expands Limbach’s design, engineering,
maintenance, capital project, and emergency mechanical solutions
capabilities in key end-markets, including data centers,
healthcare, life sciences, and higher education.
- KIM’s talented workforce, business model, and customer base
complement and bolster Limbach’s existing Mid-Atlantic business and
aligns with the Company’s strategy to expand Owner Direct
Relationships (“ODR”) with owners of mission-critical facilities in
core end-markets.
- Limbach’s current expectation is that KIM will contribute
approximately $30 million in revenue and over $4 million in EBITDA
annually beginning in 2025.
- Total consideration paid by Limbach at closing was $15 million
(subject to typical working capital adjustments). The acquisition
will be funded from available cash and has performance-based,
contingent earn-outs totaling $5 million, which would potentially
be payable over the next two years.
Management Commentary
Michael McCann, President and CEO of Limbach, said, “We are
excited to welcome the KIM team to the Limbach family. The
combination of KIM and our Mid-Atlantic operating unit will create
a dominant mechanical systems solutions provider in the high
growth, Mid-Atlantic region. KIM has an outstanding reputation for
execution excellence and strong customer relationships that align
with our strategy, values, and safety oriented and customer-centric
culture. We anticipate a modest impact in 2024 to our revenue and
earnings from the acquisition, and our primary focus will be on
integrating operations and unlocking synergies in 2025. With the
closing of this acquisition, Limbach has completed more than $50
million in transaction value in strategic acquisitions without
issuing any stock as consideration for these transactions. We
remain focused on additional potential transactions in the pipeline
that fit with our culture and expand our footprint or add
additional services.
“I want to thank Kent Island’s founder Mark Bowen for nurturing
a robust and capable organization that has attracted unbelievable
talent, including its Director of Operations Kyle Benjamin who will
join our leadership team for the Mid-Atlantic region. While Mark
retired effective with the closing, we feel honored to carry his
legacy forward. We view KIM as an ideal acquisition to support our
strategic goals and are committed to carefully pursuing additional
opportunities that generate growth and create long-term value for
our stakeholders,” concluded McCann.
Mark Bowen added, “I am thrilled to see my exceptional team join
forces with a company that shares our core values and aligns with
our long-term vision. As I transition into retirement, I do so with
complete confidence, knowing that my legacy, my dedicated team and
customers are in the most capable hands. I am excited for the next
phase of KIM’s journey under the Limbach banner.”
About Kent Island Mechanical
Founded in 2002 by President Mark Bowen, KIM is a leading
provider of building systems solutions in the Greater Washington,
D.C. metro region, including suburban Maryland and Northern
Virginia. KIM excels in designing, engineering, installing,
servicing, and maintaining mechanical, HVAC and plumbing systems
for complex facilities. Under the leadership of Director of
Operations Kyle Benjamin, KIM has become a trusted partner for
facility owners requiring a solutions-oriented approach to
constructing and maintaining complex building systems.
About Limbach
Limbach is a building systems solution firm that partners with
building owners and facilities managers who have mission critical
mechanical (heating, ventilation and air conditioning), electrical
and plumbing infrastructure. We strive to be an indispensable
partner to our customers by providing services that are essential
to the operation of their businesses. We work with building owners
primarily in six vertical markets: healthcare, industrial and
manufacturing, data centers, life science, higher education, and
cultural and entertainment. We have more than 1,300 team members in
19 offices across the eastern United States. Our team members
uniquely combine engineering expertise with field installation
skills to provide custom solutions that leverage our full
life-cycle capabilities, which allows us to address both the
operational and capital projects needs of our customers.
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, the
expected contribution from and related to our acquisition of KIM
(including expectations of revenue and EBITDA), our earnings,
Adjusted EBITDA, revenues, expenses, backlog, capital expenditures
or other future financial or business performance or strategies,
results of operations or financial condition, and in particular
statements regarding the impact of the COVID-19 pandemic on the
construction industry in future periods, timing of the recognition
of backlog as revenue, the potential for recovery of cost overruns,
and the ability of Limbach to successfully remedy the issues that
have led to write-downs in various business units. 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.
Some of these risks and uncertainties may in the future be
amplified by the COVID-19 outbreak and there may be additional
risks that we consider immaterial or which are unknown.
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, as well
as our subsequent filings on Form 10-Q and Form 8-K, which are
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.
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version on businesswire.com: https://www.businesswire.com/news/home/20240830430400/en/
Investor Relations Financial Profiles, Inc. Julie Kegley
LMB@finprofiles.com
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