Comfort Systems USA Announces Acquisitions

By: Comfort Systems USA, Inc. via Business Wire

January 05, 2022 at 16:10 PM EST

Comfort Systems USA, Inc. (NYSE: FIX) (“Comfort Systems USA”) today announced that it has acquired MEP Holding Co., Inc., and its related subsidiaries, including Edwards Electrical & Mechanical, Inc. (collectively, “Edwards”), headquartered in Indianapolis, Indiana. Comfort Systems USA also announced that it has acquired a service and controls business headquartered in Richmond, Kentucky and a temporary staffing company based in Indiana.

Edwards was founded in 1968 and performs electrical, mechanical and controls contracting services, as well as site improvement projects, in the Midwest region of the United States. Initially, Edwards is expected to contribute annualized revenues of approximately $85 to $95 million, and earnings before interest, taxes, depreciation, and amortization of $6 to $8 million.

Brian Lane, Comfort Systems USA’s Chief Executive Officer, commented, “Edwards and its affiliated companies bring us a solid full-service presence in Indianapolis, and provide Comfort Systems USA access to remarkable specialized capabilities in clean room solutions that will complement our off-site construction and pre-fabrication solutions.”

Paul Morey, President of Edwards, commented, “Having known and admired Comfort Systems USA for nearly 25 years, partnering with them was an easy decision. We greatly value their shared commitment to employee growth and education as well as the complementary focus on teamwork and customer service. This partnership will accelerate our technical innovation and offers a bright future for our business, and most importantly for our employees.”

Comfort Systems USA further announced that it has acquired Thermal Service, LLC and TES Controls, LLC (together, “Thermal”) headquartered in Richmond, Kentucky. Thermal provides complex HVAC service and automation solutions in the state of Kentucky. Thermal is expected to contribute approximately $20 million in annualized revenues at similar margins to the existing service businesses of Comfort Systems USA.

Finally, Comfort Systems USA announced that it has acquired Kodiak Labor Solutions, LLC (“Kodiak”). Kodiak is a temporary staffing agency that recruits and provides skilled labor, primarily in the Midwest and Eastern United States. Kodiak was acquired to augment labor resources and is not expected to make a material contribution to revenue on a stand-alone basis.

Brian Lane concluded, “Thermal is a true service organization with great relationships and capabilities, including high quality chiller maintenance. The Kodiak organization has strong skilled labor and recruitment talent, enjoys an ongoing relationship with several of our locations, and we believe Kodiak will help us improve our ability to staff projects and add to our strong project teams in many markets. We are very happy that Edwards, Thermal, and Kodiak are joining Comfort Systems USA and we believe that each of these businesses provide unique opportunities for mutual growth and improvement.”

Considering the required amortization expense related to intangibles and other costs associated with the transaction, these acquisitions are expected to make a neutral to slightly accretive contribution to earnings per share in 2022 and 2023.

Comfort Systems USA^® is a leading provider of commercial, industrial, and institutional heating, ventilation, air conditioning and electrical contracting services, with 168 locations in 129 cities around the nation. For more information, visit the Company’s website at www.comfortsystemsusa.com.

Certain statements and information in this press release may constitute forward-looking statements regarding our future business expectations, which are subject to applicable securities laws and regulations. The words “believe,” “expect,” “anticipate,” “plan,” “intend,” “foresee,” “should,” “would,” “could,” or other similar expressions are intended to identify forward-looking statements, which are generally not historic in nature. These forward-looking statements are based on the current expectations and beliefs of Comfort Systems USA, Inc. and its subsidiaries (collectively, the “Company”) concerning future developments and their effect on the Company. While the Company’s management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting the Company will be those that it anticipates, and the Company’s actual results of operations, financial condition, and liquidity, and the development of the industry in which the Company operates, may differ materially from those made in or suggested by the forward-looking statements contained in this press release. In addition, even if our results of operations, financial condition, and liquidity, and the development of the industry in which we operate, are consistent with the forward-looking statements contained in this press release, those results, or developments may not be indicative of our results or developments in subsequent periods. All comments concerning the Company’s expectations for future revenue and operating results are based on the Company’s forecasts for its existing operations and its acquisitions of Edwards and Thermal and do not include the potential impact of any future acquisitions. The Company’s forward-looking statements involve significant risks and uncertainties (some of which are beyond the Company’s control) and assumptions that could cause actual future results to differ materially from the Company’s historical experience and its present expectations or projections. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to: the use of incorrect estimates for bidding a fixed-price contract; undertaking contractual commitments that exceed the Company’s labor resources; failing to perform contractual obligations efficiently enough to maintain profitability; national or regional weakness in construction activity and economic conditions; the Company’s business being negatively affected by health crises or outbreaks of disease, such as epidemics or pandemics; financial difficulties affecting projects, vendors, customers, or subcontractors; the Company’s backlog failing to translate into actual revenue or profits; failure of third party subcontractors and suppliers to complete work as anticipated; difficulty in obtaining or increased costs associated with bonding and insurance; impairment to goodwill; errors in the Company’s percentage-of-completion method of accounting; the result of competition in the Company’s markets; the Company’s decentralized management structure; material failure to comply with varying state and local laws, regulations or requirements; debarment from bidding on or performing government contracts; shortages of labor and specialty building materials or material increases to the cost thereof; retention of key management; seasonal fluctuations in the demand for mechanical and electrical systems; the imposition of past and future liability from environmental, safety, and health regulations including the inherent risk associated with self-insurance; adverse litigation results; an increase in our effective tax rate; a material information technology failure or a material cyber security breach; risks associated with acquisitions; our ability to manage growth and geographically-dispersed operations; our ability to obtain financing on acceptable terms; and other risks detailed in our reports filed with the Securities and Exchange Commission (the “SEC”).

For additional information regarding known material factors that could cause the Company’s results to differ from its projected results, please see its filings with the SEC, including its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K.

Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events, or otherwise.