Limbach Holdings, Inc. (NASDAQ: LMB) has announced the acquisition of Consolidated Mechanical, Inc. (CMI) for an initial purchase price of $23 million. This acquisition is expected to contribute annualized revenue of approximately $23 million beginning in 2025, along with EBITDA of $4 million per annum.
The acquisition extends Limbach’s reach into the industrial sector, with exposure to the power generation, food processing, manufacturing, and metals markets in Kentucky, Illinois, and Michigan. CMI’s satellite presence in western Michigan complements Limbach’s existing operations in the southeast corner of the state, positioning the company to better serve a lucrative institutional market across Michigan.
CMI generates revenue primarily through owner direct relationships, with a robust mix of time and materials and cost-reimbursable revenue streams focused on repair, maintenance, and retrofit activities.
The total consideration paid by Limbach at closing was $23 million, subject to typical working capital adjustments. The acquisition was funded from available cash and has performance-based, contingent earn-outs totaling up to $2 million, which would potentially be payable over the next two years.
Limbach’s President and CEO, Michael McCann, noted that the acquisition will have a negligible impact on revenue and earnings in 2024, with the focus being on 2025, integrating operations, and unlocking synergies.
With this acquisition, the total consideration paid to date by Limbach for strategic acquisitions is more than $82 million, without issuing any stock as consideration for those acquisitions.
Chuck Thompson, CMI’s president, expressed enthusiasm about the combination with Limbach and the opportunity to expand CMI’s presence into the healthcare market and serve Limbach’s national healthcare customers.
Established in 1984 in Owensboro, Kentucky, CMI is a full-service mechanical contractor that provides piping and mechanical support, piping fabrication and installation, precision equipment installation, steel fabrication and erection, and the installation of industrial and commercial plumbing and HVAC systems. The company also specializes in plant maintenance and support, with a full-service ASME-certified UA fabrication facility.
Limbach, on the other hand, is a building systems solution firm that partners with building owners and facilities managers with mission-critical mechanical, electrical, and plumbing infrastructure. The company works primarily in six vertical markets and has over 1,300 team members in 19 offices across the eastern United States. The market has reacted to these announcements by moving the company's shares 4.1% to a price of $103.6. Check out the company's full 8-K submission here.
