Item 1.01. Entry into a Material Definitive Agreement.
Membership Interest Purchase Agreement
On December 2, 2021 (the "Effective Date"), Limbach Holdings, Inc., a Delaware
corporation (the "Company"), and Limbach Facility Services LLC, a Delaware
limited liability company and wholly-owned subsidiary of the Company (the
"Buyer"), entered into a Membership Interest Purchase Agreement (the "Purchase
Agreement") with Jake Marshall, LLC, a Tennessee limited liability company
("JMLLC"), Coating Solutions, LLC, a Tennessee limited liability company
("CSLLC" and together with JMLLC, the "Acquired Companies" and each an "Acquired
Company") and the owners of the Acquired Companies (collectively, the
"Sellers"), pursuant to which the Buyer purchased all of the outstanding
membership interests in the Acquired Companies from the Sellers (the
transactions contemplated by the Purchase Agreement collectively being the "Jake
Marshall Transaction"). The Jake Marshall Transaction closed on the Effective
Date. As a result of the Jake Marshall Transaction, each of the Acquired
Companies became wholly-owned indirect subsidiaries of the Company.
Jake Marshall Transaction Consideration
The consideration paid by the Company for the Jake Marshall Transaction was
$20.0 million in cash (the "Closing Purchase Price"). The Sellers were permitted
to retain the cash in the Acquired Companies at closing subject to certain
adjustments for working capital, which was ultimately reflected in the total
purchase price set forth in the Purchase Agreement. In addition, the Sellers may
receive up to an aggregate of $6.0 million in cash, consisting of two tranches
of $3.0 million, as more fully set forth in the Purchase Agreement, if the gross
profit of the Acquired Companies equals or exceeds $10.0 million in (i) the
approximately 13 month period from closing through 2022 (the "2022 Earnout
Period") or (ii) 2023, respectively (collectively, the "Earnout Payments"). To
the extent, however, that the gross profit of the Acquired Companies is less
than $10.0 million, but exceeds $8.0 million, during the 2022 Earnout Period or
2023, the $3.0 million amount will be prorated for such period.
Representations, Warranties and Covenants; Indemnification
The parties to the Purchase Agreement have made customary representations,
warranties and covenants in the Purchase Agreement. Subject to certain
limitations and conditions set forth in the Purchase Agreement, the Company and
Buyer, on the one hand, and the Sellers, on the other hand, have agreed to
indemnify each other for, among other things, breaches of representations,
warranties and covenants contained in the Purchase Agreement, and certain tax
and other pre- and post-closing liabilities. To supplement the indemnification
provided by the Sellers, the Buyer has held back $1.0 million of the purchase
price and deposited such amount in escrow.
The foregoing description of the Purchase Agreement does not purport to be
complete and is qualified in its entirety by the full text of the Purchase
Agreement, a copy of which is attached hereto as Exhibit 2.1 and is incorporated
herein by reference. The Purchase Agreement is incorporated by reference in this
filing to provide investors with information regarding its terms. It is not
intended to be a source of financial, business, operational or other factual
information about the Company or the Acquired Companies or to modify or
supplement any factual disclosures about the Company in its other public reports
filed with the U.S. Securities and Exchange Commission. In particular, the
representations, warranties and covenants and other obligations contained in the
Purchase Agreement were made only for the purposes of the Purchase Agreement and
made as of the dates specified therein; are solely for the benefit of the
parties to the Purchase Agreement; may be subject to limitations or
qualifications agreed upon by the parties in connection with negotiating the
terms of the Purchase Agreement, including being qualified or limited by
confidential disclosure schedules made between the parties for the purposes of
allocating contractual risk between them instead of establishing matters as
facts; and may be subject to a standard of materiality provided for in the
Purchase Agreement that differs from the standard applicable to investors.
Investors should not rely on the representations, warranties and covenants and
other obligations or any descriptions thereof as characterizations of the actual
state of facts or condition of the Company, the Acquired Companies or any of
their respective subsidiaries or affiliates. Moreover, information concerning
the subject matter of the representations, warranties and covenants may have
changed after the date of the Purchase Agreement, which subsequent information
may or may not be fully reflected in public disclosures.
A&R Credit Agreement
As well, on December 2, 2021, and in connection with the Jake Marshall
Transaction, Limbach Facility Services LLC (the "Borrower"), Limbach Holdings
LLC (the "Intermediate Holdco") and the direct and indirect subsidiaries of the
Borrower from time to time included as parties to the agreement (the
"Guarantors") entered into the Amended and Restated Credit Agreement (the "A&R
Credit Agreement") by and among the Borrower, Intermediate Holdco, the
Guarantors, the lenders party thereto from time to time, Wheaton Bank & Trust
Company, N.A., a subsidiary of Wintrust Financial Corporation (collectively,
"Wintrust"), as administrative agent and L/C issuer, Bank of the West as
documentation agent, M&T Bank as syndication agent, and Wintrust as lead
arranger and sole book runner.
In accordance with the terms of the A&R Credit Agreement, Lenders are providing
to Borrower (i) a $35.5 million senior secured term loan (the "Term Loan"); and
. . .
Item 2.01. Completion of Acquisition or Disposition of Assets.
The disclosure set forth in Item 1.01 is incorporated into this Item 2.01 by
reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The disclosure set forth above under Item 1.01 regarding the A&R Credit
Agreement is incorporated herein by reference.
Item 7.01 Regulation FD Disclosure.
On December 3, 2021, the Company announced the consummation of the Jake Marshall
Transaction. A copy of the press release is furnished herewith as Exhibit 99.1.
Also furnished herewith as Exhibit 99.2 is a copy of an investor presentation
that will be used by the Company relating to the Jake Marshall Transaction.
The information in this Item 7.01 and Exhibits 99.1 and 99.2 attached hereto is
being furnished and shall not be deemed "filed" for purposes of Section 18 of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or
otherwise subject to the liabilities of that section, nor shall it be deemed
incorporated by reference in any filing under the Securities Act of 1933, as
amended, or the Exchange Act, except as expressly set forth by specific
reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired.
The Company will file the financial statements required by Item 9.01 (a) of Form
8-K by an amendment to this Current Report on Form 8-K no later than 71 days
from the date this Current Report on Form 8-K is required to be filed.
(b) Pro Forma Financial Information.
The Company will file the pro-forma financial statement required by Item 9.01
(b) of Form 8-K by an amendment to this Current Report on Form 8-K no later than
71 days from the date this Current Report on Form 8-K is required to be filed.
(d) Exhibits
Exhibit
No. Description
2.1 Membership Interest Purchase Agreement, dated as of December 2, 2021, by
and between Jake Marshal, LLC, Coating Solutions, LLC, Richard L. Pollard,
Matthew S. Pollard, Limbach Holdings, Inc. and Limbach Facility Services
LLC.
10.1 The Amended and Restated Credit Agreement dated as of December 2, 2021,
by and among Limbach Facility Services LLC, a Delaware limited liability
company, Limbach Holdings LLC, a Delaware limited liability company, and
the direct and indirect subsidiaries of the Borrower from time to time
party to the agreement, as Guarantors, the various institutions from time
to time party to the agreement, as Lenders, Wheaton Bank & Trust Company,
N.A., a subsidiary of Wintrust Financial Corporation, as Administrative
Agent and L/C Issuer, Bank of the West, as Documentation Agent and M&T
Bank, as Syndication Agent and Wheaton Bank & Trust Company, N.A., a
subsidiary of Wintrust Financial Corporation, as Lead Arranger and Sole
Book Runner
99.1 Press Release, dated December 3, 2021.
99.2 Investor Presentation, December 3, 2021.
104 Cover Page Interactive Data File (formatted as Inline XBRL and contained
in Exhibit 101)
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