Limbach Holdings, Inc. · NASDAQ:LMB
Limbach — SPAC Merger (April 2016)
38 slides from Limbach's SPAC merger presentation, Apr 25, 2016
Slide 1: 1347 Capital Corp. / Limbach Holdings LLC Investor Presentation
1347 Capital Corp. / Limbach Holdings LLC Investor Presentation April 2016
Slide 2: Forward Looking Statements
Forward Looking Statements Neither 1347 Capital Corp., Limbach nor any of their respective affiliates makes any representation or warranty as to the acc ura cy or completeness of the information contained in this presentation. The sole purpose of the presentation is to assist persons in deciding whe
Slide 3: Investment Thesis: Historic Company in Industry Where SPACs Work
3 Investment Thesis: Historic Company in Industry Where SPACs Work Transaction Brief : 1347 Capital Corp . (“ 1347 ”) has signed a definitive agreement to merge with Limbach Holdings , LLC (“ Limbach ”) in a transaction valued at approximately $ 97 million Opportunity to invest in a nationally - rec
Slide 4: Transaction Rationale: Why it Makes Sense for Both Sides
4 Transaction Rationale: Why it Makes Sense for Both Sides • SPAC raised $ 46 million with a goal of repeating management’s past merger / spin - out successes • Sought scalable company with an enterprise value of between $ 80 - $ 200 million • Strong business with a long - history in engineering and
Slide 5: Prior SPAC – E&C Company Mergers Have Been Very Successful
Prior SPAC – E&C Company Mergers Have Been Very Successful • Hill International (HIL) • Merger took place in Q2 of 2006 • Enterprise value at June 30, 2006 was estimated at ~$98 million • Current Enterprise Value of $294 million • 10 year CAGR of 11.6% • Primoris Corp (PRIM) • Merger took place in Q
Slide 6: Why Limbach?
Why Limbach ? 6 Limbach is a preeminent national provider of mechanical design, engineering, installation and maintenance services Offering a single - source, innovative and technologically sophisticated solution for the design, installation, service, maintenance, repair, retrofit and energy efficie
Slide 7: Transaction Overview (continued)
Transaction Overview (continued) 7 Compelling Valuation Motivation for Transaction • Vintage portfolio company of FdG Associates • Going public provides tax - efficient currency for future acquisitions • Improved access to capital markets • Improved stature within the industry as a NASDAQ - listed p
Slide 8: Transaction Overview
Transaction Overview 8 Transaction Overview & Transaction Consideration Transaction Sources/Uses Waterfall • 1347 Capital Corp . (“ 1347 ”) has signed a definitive agreement to merge with Limbach Holdings, LLC (“Limbach”) in a transaction valued at approximately $ 97 million • Founded in 1901 , Limb
Slide 9: Transaction Valuation
Transaction Valuation 9 Valuation At Close (1) Implied Multiples At Close Ownership at Close (1) Public Shares 64% 1347 Sponsor 17% Pre - Merger Limbach Unit - Holders 19% 1 Assumes no 1347 shareholder redemptions 2 Does not include warrants 3 Does not reflect pro forma public company expenses (esti
Slide 10: Investment Details – Why Limbach?
10 Investment Details – Why Limbach ? • Non - residential construction expected to continue rebounding from post - recession low which occurred in 2011 * • Projected growth rates for the 2015 - 2020 period show positive trends in all sub - verticals * • Architectural billing index trending over 50 o
Slide 11: Favorable Market Dynamics
LIMBACH Since 190 ceositenty ceeding Expectations Favorable Market Dynamics
Slide 12: Non-Residential Construction – Large Market with Tailwinds
Strong signs of market recovery = Ample opportunities to drive growth Non - Residential Construction Put - in - Place ($ in billions) Source: Data for 1994 - 2009 per FMI's 2011 U.S. Markets Construction Overview; data for 2010 and later per FMI's 2016 Construction Outlook First Quarter Report. 12 N
Slide 13: Improving Industry Outlook: Growth forecasted across multiple markets
Growth forecasted across multiple markets Improving Industry Outlook Construction Forecasts Source: FMI's 2016 Construction Outlook First Quarter Report. • Architectural Billing Index trending over 50 on a consistent basis which indicates increase in billings • Strong activity in core end - markets
Slide 14: Premium Brand Name
LIMBACH Since 190 I Coser Eceedng © Premium Brand Name i
Slide 15: Depth of Limbach's Leadership Team
Depth of Limbach’s Leadership Team 15 Experienced Management Team Assembled to Lead Limbach During its Expansion Chief Executive Officer EVP, Chief Operating Officer EVP, Chief Financial Officer EVP, Maintenance & Service Director of Human Relations SVP, Chief Learning Officer President, Engineering
Slide 16: Limbach – Long and Proud History
Limbach – Long and Proud History 16 Founded in 1901 by Frank Limbach, a talented metal craftsman, who created a one - person roofing and sheet metal company in Pittsburgh, PA, with little but his own integrity and skill Limbach - the “1 st Choice” of customers as a specialty contractor and service f
Slide 17: Attractive Vertical Markets – Specialty Niche with Brand Recognition
Attractive Vertical Markets – Specialty Niche with Brand Recognition Focus on large and growing markets that require specialized technical capabilities and solutions Limbach is a desired partner for leading general contractors and construction managers Commercial Healthcare OSU Cancer Center Transpo
Slide 18: Outstanding Construction and Service Relationships
Outstanding Construction and Service Relationships 18
Slide 19: Limbach – Wide Geographic Reach With Room to Expand
Limbach – Wide Geographic Reach With Room to Expand Employees Size Bonding 1,300 + Top 12 $600 million W ESTERN P ENNSYLVANIA E ASTERN P ENNSYLVANIA S OUTHERN C ALIFORNIA M ICHIGAN O HIO N EW J ERSEY N EW E NGLAND M ID - A TLANTIC O RLANDO T AMPA 19 The Company has a broad geographic footprint opera
Slide 20: Differentiated Strategy
LIMBACH Since 190 Coniston Exceeding Expects Differentiated Strategy
Slide 21: Limbach – Value Proposition
Limbach – Value Proposition 21 • High - touch Engineering Expertise – Professional Engineers to challenge the design team and bring additional ideas • Strong Direct Relationships – Leading general contractors and construction managers – Building owners • Utilization of Technology to Maximize Service
Slide 22: Full Mechanical Capabilities
Full Mechanical Capabilities Building Information Modeling Off - Site / Pre - fabrication 24/7 Service Engineering Commissioning Energy Modeling Construction and Installation Conceptual Estimating Operations and Maintenance 22
Slide 23: The Importance of Mechanical Systems
The Importance of Mechanical Systems • HVAC systems are critical to building function and comprise the largest component of building investment, operating expenses and energy use • Energy efficiency programs can reduce overall building energy costs by as much as 30 % , with proper operations and mai
Slide 24: Pre-Construction Design and Engineering
Pre - Construction Design and Engineering 24 • With more than 27 Professional Engineers on staff, Limbach Engineering and Design Services (“LEDS”) is a provider of turnkey mechanical design and engineering services throughout the Limbach organization • LEDS provides the Company with a significant co
Slide 25: Construction and Installation Services
Construction and Installation Services 25 • Limbach’s extensive fabrication and installation capabilities are tailored to the unique attributes of each local market ‒ Strength of local labor relationships ‒ Comparative economics and relative risk of in - house fabrication and trade self - performanc
Slide 26: Service, Operations and Maintenance
• The Company’s service and maintenance operations are fundamental to the full - lifecycle service offering ‒ Higher margin, recurring revenue business model driven by contractual maintenance base ‒ Substantial “pull - through” spot, small project, and negotiated emergency and expansion work • Over
Slide 27: Annuity Streams: Maintenance
Annuity Streams: Maintenance 27 • Limbach’s contractual maintenance base has increased steadily in response to recent investments in sales people, training and business development efforts • Growth in the maintenance base has driven a greater increase in pull - through special project and constructi
Slide 28: Focused Growth Plan
LIMBACH ‘Since 190] Conistenty Exceeding Expectations Focused Growth Plan
Slide 29: Core Growth Plan
Ideally positioned to expand service capabilities and take share as the market recovers and demand for technically complex and energy efficient buildings grows Core Growth Plan • Establish Limbach as a national platform through expansion into adjacent geographic areas • Complementary strategic acqui
Slide 30: Geographic Expansion – Florida Provides A Roadmap For Success
Significant greenfield expansion Geographic Expansion - Florida Provides A Roadmap For Success 30 • Limbach , through its open shop Harper Limbach subsidiary, has operated profitably in Central Florida for over two decades through its principal location in the Orlando market ‒ Solid track record of
Slide 31: Strategic Acquisitions
Limbach’s access to capital will enable pursuit of unique acquisition opportunities that can integrate ideally into its geographic / service expansion model Strategic Acquisitions Attractive Acquisition Environment Geography Integrated MEP Platform • Highly fragmented industry dominated by small, si
Slide 32: Conclusion
Conclusion • Strong established brand and recognized industry leader – top 12 firm • Full - service capabilities, technical expertise, strong customer relationships • Significant investments in scalable and sophisticated operating platform and people • Multiple avenues for organic and acquisition -
Slide 33: Appendix – Financial Exhibits
Appendix – Financial Exhibits
Slide 34: Financial Performance
Financial Performance 34 • Significant backlog coverage (94%) provides strong forward visibility for 2016 and 2017 • Excludes promised projects totaling ~$100 million which are awaiting final documentation and are expected to be booked over the coming quarter • Growth of recurring, higher margin mai
Slide 35: Financial Performance – Strong Backlog / EBITDA Growth Rate
Financial Performance – Strong Backlog / EBITDA Growth Rate Historical Performance Comments • Strong forward visibility with large backlog and revenue coverage • Growth of recurring, higher margin maintenance services provides stability and improved profit mix • Competing on capabilities versus pric
Slide 36: Balance Sheet Supports Large Scale Projects and Bonding Ability
Balance Sheet Supports Large Scale Projects and Bonding Ability Historical Balance Sheet 36 ($ in thousands) 12/31/2014 12/31/2015 Cash $8,612 $6,107 Restricted Cash 63 63 Accounts receivable, not of allowance 73,858 85,357 Gross underbillings 12,896 20,745 Other current assets 1,748 1,799 Total Cur
Slide 37: Comparable Companies Analysis
Comparable Companies Analysis 37 Data as of April 21, 2016 Source: Capital IQ Limbach Comparable Companies Analysis ($ in millions except Share Price) April 21, April 21, April 21, LTM 2016 CY LTM 2016 CY LTM LTM 2016 CY Company 2016 2016 2016 Estimate Estimate Estimate Share Market Enterprise EV/ E
Slide 38: Forward-Looking Statements; Additional Information about the Business Combination