FdG Buyout Pulls Limbach From Enron –

FdG Associates recently announced plans to acquire Limbach Facility Services and its subsidiaries in a management buyout, allowing Limbach to emerge from the ashes left behind from Enron’s momentous collapse.

The deal also turned 50 members of the Limbach management team into co-owners, although a spokesperson at each firm declined to comment on specifics.

FdG Director Mark Houser said the firm would own “well over 50% of Limbach.”

Houser said there are three layers of debt: A $500 million surety bond put up by Kemper and St Paul [insurance policies unique to the construction industry], $60 million in senior debt provided by Harris Bank and LaSalle, and $10 million in the form of mezzanine debt from Canterbury Capital. Canterbury also owns a minority stake in Limbach.

The deal was originated when Limbach’s management team, through the accounting firm Plante & Moran, reached out to firms with a history of financing deals in the construction industry, including Harris, who then introduced FdG to Limbach.

By April 2002, FdG had been tagged with the label preferred bidder,’ stemming from a bidding process guided along by a creditors committee and its advisors, which included The Blackstone Group and Houlihan, Lokey, Howard & Zukin.

“This was a normal, competitive bid, with multiple rounds,” said Houser. “We had an ace in the hole, based on the relationship we forged with Limbach management.”

FdG invests capital for two New York-based families – the Fishers and the de Gunzburgs. Its debut fund, which closed with $205 million in May 1999, also included outside investors, such as the New York City Teachers’ Retirement System, New York City Police Pension Fund, New York City Employees’ Retirement System and New York City Fire Pension Fund. Currently, the fund is more than 50% invested.

“We focus on two types of transactions-recapitalizations of family-owned businesses, our bread and butter, and management buyouts,” said Houser. “[Limbach] saw an opportunity to buy itself out of Enron.”

Founded in 1901, Limbach provides constructions services, including mechanical and electrical construction, pipefitting, sheet metal fabrication and engineering and mechanical construction management services. The company also provides facility maintenance and other services.