Emcor entered into a definitive agreement to purchase energy efficiency specialty services firm ECM Holding Group, the company announced Wednesday.
The all-cash transaction, slated to close in the third quarter of 2023, is expected to strengthen Emcor’s energy efficiency specialty services operations and expand its bundled energy conservation and sustainability solutions portfolio, the company said. Terms of the transaction were not disclosed.
Emcor Building Services’ president and CEO Mike Bordes noted that ECM’s leadership team would bring extensive experience in serving energy services companies, including strong relationships with some of the biggest U.S. commercial and industrial energy service companies.
“ECM’s ability to identify, validate and self-implement multiple energy conservation measures offers a streamlined and replicable approach for our customers to achieve their sustainability goals,” Bordes said in the release.
ECM is a national provider of energy efficiency retrofit services, with specific business units that provide solutions to protect, restore and boost the efficiency of HVAC, lighting, water, weatherization and airflow management systems. Founded and headquartered in Wisconsin, the energy specialist is projected to generate $60 million in revenue in 2023, in part from its energy conservation solutions, which include third-party reviewed energy projections, project management, and measurement and verification programs.
Based in Connecticut, Emcor serves Fortune 500 companies through a combination of mechanical and electrical construction, industrial and energy infrastructure, and building services. As a Gold Member of the U.S. Green Building Council, the organization employs hundreds of LEED-certified engineers and project managers to help clients curtail energy costs and achieve sustainability goals.
Emcor’s snap-up of ECM is the latest in a string of acquisitions, which come at a time of strong financial performance. These include six company purchases totaling more than $100 million through 2022, according to its 2022 Annual Report, and eight acquisitions totaling about $131 million in 2021.
The public company’s shares have reflected the growing focus and demand for sustainability in buildings, both in new construction and retrofits, increasing 76.2% year-over-year compared with the Zacks Building Products - Heavy Construction industry’s 47.8% growth, according to Nasdaq and the release. The stock closed at $183.57 Thursday, up 80.57% over its price of $101.41 on July 6, 2022.
Emcor’s 2022 annual report says that its strong acquisition plan solidifies its objectives to strengthen its geographical footprint. ECM will provide access to the Midwest region and help improve EMCOR’s existing electrical and mechanical construction and facilities services operations segment.
This business segment accounted for approximately 61% of Emcor’s $11.1 million in total 2022 revenue. Emcor stated that most of that revenue comes from helping buildings meet critical power supply, fire protection, environmental control and air quality requirements.
ECM was recently named a finalist for the Arizona Forward Environmental Excellence awards for its ThermaClear product, which uses “advanced nanotechnology” to decarbonize commercial buildings and lower the amount of power required to operate HVAC equipment. It says ThermaClear is designed to help commercial facilities reduce carbon emissions and energy consumption by up to 20% annually.
Following the deal, Emcor declared a $0.18 quarterly dividend per share, payable July 31, according to Seeking Alpha.
