Dive Brief:
- Pennsylvania-based Limbach Holdings extended a move into long-term service contracts by acquiring Minnesota-based mechanical contractor Pioneer Power, Inc., earlier this month for $66 million.
- Limbach specializes in developing and upgrading HVAC, plumbing and other facility infrastructure projects. With the acquisition, it’s building on a shift since going public in 2021 to add more owner-direct relationships business to its portfolio. ODR business typically involves ongoing maintenance and repair work for facilities as part of longer term contracts.
- “It aligns well with our strategic shift towards prioritizing ODR,” said Michael McCann, Limbach’s president and CEO.
Dive Insight:
The move into more ODR business enables Limbach to tap into an expanding profit area, says Valens Research.
“Over time, they expand the scope of services they take on for clients by cross-selling additional offerings and completing projects like equipment replacement,” Valens Research Chief Investment Strategist Joel Litman and Director of Research Rob Spivey say in their analysis.
The majority of Pioneer Power’s revenue comes from time and materials contracts, and small capital project work focused on maintenance, renovation and retrofit activity, according to Limbach. Pioneer’s scope of work includes capital projects, facility expansions, renovations and retrofits, and recurring industrial maintenance services. It primarily operates in the upper Midwest.
With the acquisition, Limbach is building on capabilities it acquired in its 2024 purchase of Consolidated Mechanical, which provides mechanical, millwright, steel fabrication, plumbing, maintenance and outage services in Kentucky, Michigan and Illinois. That deal was for $23 million.
Under ODR contracts, Limbach works directly with building owners to provide facility services over extended periods — typically five to 10 years.
