Limbach Holdings, Inc. (NASDAQ: LMB) extended its impressive upward trajectory during after-hours trading on Thursday. Limbach stock surged 4.45% to $31.93 in post-market transactions, building upon its earlier momentum during the regular session, where it recorded a 1.83% gain to conclude at $30.57. This surge in LMB stock price can be directly attributed to a significant strategic move.
Limbach (LMB) disclosed its successful acquisition of Industrial Air, LLC (“IA”) on the preceding day. The acquisition was carried out for a starting corporate valuation of $13.5 million, with the whole deal being finalized in currency. IA, situated in Greensboro, North Carolina, specializes in delivering ecological mechanical resolutions, air purification setups, and personalized air management machinery designed to meet the requirements of manufacturing customers.
Notably, IA possesses a specialized proficiency in addressing the critical requirements of prominent enterprises within the textile industry. IA’s operational framework harmonizes seamlessly with Limbach’s strategic focus on capitalizing on opportunities within Owner Direct Revenue (ODR) and delivering essential solutions to owners of advanced manufacturing and processing facilities.
Limbach anticipates that IA will make an average annual contribution of approximately $30.0 million in revenue and $4.0 million in EBITDA. The financial consideration offered by Limbach at the transaction’s completion amounted to $13.5 million, funded from readily available cash resources. Furthermore, the deal includes performance-based, contingent earn-outs, which have the potential to yield an additional $6.5 million in payments over the following two years.
As Limbach continues to carve a distinctive path within its industry, its growth strategy is anchored on three fundamental pillars. LMB was actively seeking companies that shared its cultural values, enabling it to expand into new geographical regions and bolster its presence east of the Mississippi River.
The acquisition of IA represents a remarkable opportunity for Limbach to perpetuate its track record of acquiring firms that align with its geographical expansion objectives. By serving as an essential provider of mechanical solutions to the textile and related industries, IA has established itself as an authority within its niche market sector.
Moreover, IA’s substantial emphasis on Owner Direct Revenue (ODR) synergizes seamlessly with LMB’s operational model, promising a highly advantageous collaboration. While Limbach foresees that IA’s impact on its revenue and earnings in 2023 will be modest, it anticipates a more substantial contribution to its full-year 2024 results.
