PITTSBURGH--(BUSINESS WIRE)--Limbach Holdings, Inc.(NASDAQ: LMB) announced the repurchase of approximately $3 million of its existing Class A Preferred Stock, together with the accrued dividends associated with the partial repurchase. The Preferred Stock, which was issued on July 20, 2016, currently pays an 8% preferred dividend, increasing to 12% over the six-year term of the preferred, and may be converted (at the holder’s election) into 2.00 shares of the Company’s common stock for each preferred share held (as may be adjusted for any stock splits, reverse stock splits or similar transactions), representing a conversion price of $12.50 per share.
The Company repurchased 120,000 shares of its Preferred Stock from former sponsor 1347 Investors, funding the repurchase using bank debt carrying a current annual interest rate of approximately 5%, for an aggregate sum of approximately $4,092,153 in cash. Management expects the repurchase to be accretive to net income. Following the repurchase, Limbach will have approximately 280,000 remaining shares of Preferred Stock outstanding and will, for a period of six months, have the right to repurchase the remaining shares for the same purchase price per share at the time of any exercise of the repurchase option. As part of the agreement, 1347 Investors has also agreed to a three-month extension of the lock-up period on 509,500 common shares it holds, which was due to expire on July 20, 2017.
Management Commentary
Charlie Bacon, CEO of Limbach commented, “We are pleased to continue the process of reducing the Company's cost of capital in a manner that rewards our existing shareholders while also being accretive to Limbach's bottom line. Our ability to redeem a portion of the Preferred Stock at this time using lower-cost senior debt is an indication of our strengthening balance sheet and consistent operating performance. Furthermore, we retain the ability to pursue strategic M&A opportunities and fund long-term growth initiatives.”
About Limbach
Limbach Holdings, Inc. is an integrated building systems provider, managing all components of mechanical, electrical, plumbing and control systems, from system design and construction through performance and maintenance. The Company engineers, constructs and services the mechanical, plumbing, air conditioning, heating, building automation, electrical and control systems in both new and existing buildings. Customers include building owners in the private, not-for-profit and public/government sectors. With headquarters in Pittsburgh, PA., Limbach operates from 10 strategically located business units throughout the United States, including Western Pennsylvania (Pittsburgh), Eastern Pennsylvania (Warrington, PA), New Jersey (South Brunswick), New England (Wilmington, MA), Ohio (Columbus and Athens, OH), Michigan (Pontiac and Lansing, MI), Southern California (Seal Beach, CA), and Mid-Atlantic (Laurel, MD). Our design engineering and innovation center, Limbach Engineering & Design Services, is based in Orlando, Florida. Harper Building Systems, a Limbach Holdings, Inc. company, operates throughout Florida with offices in Tampa and Lake Mary, north of Orlando. Our approximately 1,400 employees strive to be the customer’s 1st Choice in terms of the services provided, vertical markets and geographies served. Our commitment to safety, advanced technology, human development and reliable execution has enabled Limbach to attract and retain the industry’s top leadership talent, skilled craftspeople and professional management staff.
