American technical and consulting services company Willdan Group has signed an agreement and plan of merger to acquire all outstanding shares of Lime Energy for a cash consideration of $120m.
Willdan expects the acquisition of Lime Energy to close during the fourth quarter of 2018.
The $120m purchase price equates to nearly 10 times the company’s estimate of Lime Energy’s anticipated Adjusted EBITDA for 2018. Willdan expect s Lime Energy’s 2018 revenue to be approximately $145m.
Lime Energy designs and implements direct install energy efficiency programs for utilities. The programs help businesses consume less energy through the upgrade of existing equipment and installation of new, energy-efficient equipment.
Furthermore, utilities will be able to delay investments in transmission and distribution upgrades and new power plants, while complying with increasing environmental regulations.
These programs are intended to benefit customers of utilities by lowering energy bills, improving reliability of equipment, reducing maintenance costs, and improving operations of electric grid.
The company has delivered energy efficiency programs for 10 of the 25 largest utilities and five of the 10 largest municipal utilities in the US.
According to Willdan, the acquisition of Lime Energy will further expand its presence in the energy services market and improve the company’s offerings.
The acquisition is also expected to provide Willdan the opportunity to diversify its geographical presence, including in the southeastern and mid-Atlantic regions of the US where Willdan currently has limited operations.
Lime Energy delivers energy efficiency programs to some of the largest electric utilities that are not currently Willdan’s clients and the transaction is expected to expand Willdan’s utility customer base.
Also, the acquisition will enable the company to take advantage of the upcoming expansions in energy efficiency budgets and contracts in California and the northeastern US.
It has also entered into a new credit agreement with a syndicate of BMO Harris Bank and MUFG Union Bank as lenders and with BMO as administrative agent.
Under the new credit facility, Willdan’s will be eligible for up to a $90m delayed draw senior secured term loan, subject to certain conditions, including the completion of the acquisition of Lime Energy, and a $30m senior secured revolving credit facility, each maturing on October 1, 2023.
The new credit facilities will replace Willdan’s existing credit agreement with BMO, which has been in place since 2014.