Limbach Holding announces partial repurchase of preferred stock
Limbach Holdings 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 into 2.00 shares of the cmpany's common stock for each preferred share held, 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. 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."