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Limbach Holdings announces acquisition of Dunbar Mechanical Inc for about USD20.2m.

M2 EQUITYBITES-September 20, 2018-Limbach Holdings announces acquisition of Dunbar Mechanical Inc for about USD20.2m


Limbach Holdings Inc (Nasdaq:LMB) revealed on Thursday that it signed a definitive agreement to acquire Dunbar Mechanical Inc, for an enterprise value of about USD20.2m from its stockholders.

A private company, Dunbar provides mechanical construction services in Toledo, Ohio and the surrounding region. It supports the maintenance and growth capital project needs of regional industrial customers and also provides new construction and renovation services. Limbach and Dunbar have worked together since 2016 in the Toledo area.

Accordingly, this acquisition reinforces the company's position in the Ohio market and provides a substantial industrial resume. It will further support Dunbar's growth by leveraging its corporate platform. On an annual basis, Dunbar will contribute revenue of about USD75m initially.

Further, subject to the terms and conditions of the purchase agreement, the company's purchase price consists of USD4.0m of LMB common stock, which is about 402,000 shares and a USD3.6m subordinated seller note with a two-year maturity and USD12.6m in cash, subject to adjustment as set forth in the purchase agreement. The cash part of the consideration will be financed through new term loan borrowings under its existing senior credit facility.

Finally, the company mentioned that the transaction is subject to customary closing conditions such as a condition that it secures the requisite debt financing. Thereafter, it will close within 60 days.

A mechanical systems solutions company, Limbach was founded in 1901. It provides building infrastructure services and has 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. It has 14 offices in the US.

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Publication:M2 EquityBites (EQB)
Date:Sep 20, 2018
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