WARRENDALE, Pa. - Limbach Holdings, Inc. (NASDAQ:LMB), a provider of building systems solutions currently valued at $1.12 billion, has announced the acquisition of Consolidated Mechanical, Inc. (CMI), a move that broadens its industrial service offerings and strengthens its presence in Kentucky, Illinois, and Michigan. According to InvestingPro analysis, Limbach's stock is currently trading near its Fair Value.
CMI, established in 1984 and headquartered in Owensboro, Kentucky, specializes in mechanical services for the heavy industrial sector, including power generation and food processing. The acquisition, which was internally sourced, aligns with Limbach's strategic growth objectives. Limbach purchased CMI for an initial sum of $23 million, with the expectation that CMI will contribute annualized revenue of around $23 million from 2025 and an EBITDA of $4 million per annum. This acquisition comes as Limbach demonstrates strong financial performance, with InvestingPro data showing a remarkable 118.8% year-to-date return and current EBITDA of $48.22 million.
The transaction is seen as a strategic extension for Limbach, particularly enhancing its capabilities in the industrial mechanical services sector. CMI's existing operations in Western Michigan are also expected to complement Limbach's presence in the state, potentially boosting the company's market share in Michigan's institutional sector.
Funded by available cash, the acquisition includes performance-based, contingent earn-outs totaling up to $2 million over the next two years. This purchase continues Limbach's pattern of strategic growth without issuing stock as consideration for acquisitions.
Michael McCann, Limbach's President and CEO, expressed enthusiasm for the integration of CMI into Limbach's operations, citing the acquisition as a key component in expanding service offerings and achieving strategic goals. He anticipates that the acquisition will not significantly impact Limbach's 2024 revenue and earnings but will become more influential in 2025 as the companies integrate and operational synergies are realized. InvestingPro analysis shows Limbach maintains a strong financial position with an overall health score rated as 'GREAT' and holds more cash than debt on its balance sheet. Subscribers can access 12 additional ProTips and comprehensive financial metrics through the platform's detailed research reports.
Chuck Thompson, President of CMI, also remarked positively on the acquisition, highlighting the shared cultures of the two companies and the potential for growth in Limbach's industrial presence and expansion into healthcare markets.
Limbach Holdings, with over 1,300 team members across the United States, provides essential mechanical, electrical, and plumbing services to various sectors including healthcare, industrial, data centers, and education.
This report is based on a press release statement from Limbach Holdings, Inc. and does not include any speculative content regarding the broader industry impacts or future trends.
In other recent news, Limbach Holdings reported a 4.8% increase in total revenue to $133.9 million in its Q3 earnings call, with a significant growth in owner-direct revenue (ODR). The company's adjusted EBITDA also rose by 27.2% to $17.3 million. Stifel initiated coverage on Limbach Holdings, issuing a Buy rating with a price target of $108.00, based on the company's strategic shift towards smaller, higher-margin, and less cyclical projects. The firm's analysis suggests that this move could improve Limbach's financial performance and reduce risk over time. Limbach also completed four strategic acquisitions, including Kent Island Mechanical, and revised its fiscal year revenue guidance upwards to between $520 million and $540 million. CEO Mike McCann expressed optimism about future acquisitions and their impact on market presence and service offerings. These are among the recent developments for Limbach Holdings.
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