Limbach Holdings, Inc. Acquires Greensboro, NC – Based Specialty Mechanical Contractor Industrial Air, LLC

WARRENDALE, Pa.— November 2, 2023 — Limbach Holdings Inc. today announced the closing of the acquisition of Industrial Air LLC (IA), a specialty mechanical contractor based in Greensboro, N.C., for an initial enterprise value of $13.5 million in an all-cash transaction.

Transaction Highlights

  • IA provides environmental mechanical and air filtration solutions and custom air handling equipment to industrial customers, with a particular expertise in serving the mission critical needs of leading businesses in the textile industry.
  • Headquartered in Greensboro, IA establishes Limbach’s presence in a diversified and fast-growing geographic market from which the company can continue to expand in the industrial and institutional sectors.
  • IA’s business model aligns well with Limbach’s focus on executing on ODR opportunities and providing critical solutions to owners of sophisticated manufacturing and process facilities.
  • IA expects to contribute on average an estimated $30 million in revenue and $4 million in EBITDA annually.
  • Total consideration paid by Limbach at closing was $13.5 million (subject to typical working capital adjustments), sourced from available cash, with performance-based, contingent earn-outs totaling $6.5 million potentially being paid over the next two years.

Background on Industrial Air Inc.

Founded in 1964 and led by second generation President Allen R. Hunter Jr., IA serves industrial customers throughout the Southeast United States and along the Eastern Seaboard. IA focuses on delivering engineered air handling systems, including air condition and air filtration, along with controls systems and maintenance work.

Management Comments

Michael McCann, Limbach’s president and CEO, said, “As we continue to carve our path in the industry, our growth strategy unfolds through three critical pillars. We seek culturally compatible firms, encompassing small ‘tuck-in’ deals and larger opportunities that will enable us to enter new geographies as we look to fill out our footprint east of the Mississippi river. Acquiring IA presents an exciting frontier, allowing us to continue to complete acquisitions that meet our geographic expansion objectives. The Carolinas offer a growing and diversified market well-represented by leading companies operating mission-critical facilities within our six core verticals. Serving as an indispensable provider of mechanical solutions to textile and other industries, IA functions as a solutions expert in their niche market sector.

Additionally, IA’s ‘ODR-heavy’ model aligns seamlessly with our own, promising an exciting synergy. They have also demonstrated alignment with our culture, strong leadership, and unique strengths, all critical when acquiring a new firm. With the acquisition closing yesterday, we expect that IA’s impact on Limbach’s revenue and earnings in 2023 will be minimal. However, we anticipate a more substantial contribution in our full-year 2024 results. More generally, we continue to view the acquisition environment favorably and remain committed to executing additional transactions that meet our acquisition criteria.”

IA’s President Allen R. Hunter Jr. added, “After multiple generations of family ownership during which IA became a leading, solutions-oriented provider of mechanical services and fabricated equipment, we’re excited to join the Limbach family. I’m most excited about our firms’ cultural compatibility and Limbach’s intention to create long-term career opportunities for IA team members. In addition, we are looking forward to leveraging Limbach’s engineering and design capabilities and corporate services platform to maximize the opportunities in our market. I am looking forward to continuing to lead the IA business unit, and to growing our presence in mission critical markets.”

Posted: November 2, 2023

Source: Limbach Holdings, Inc.