EMCOR Group, Inc. Completes Acquisition of Miller Electric Company

Rhea-AI Summary

EMCOR Group (NYSE: EME) has completed its acquisition of Miller Electric Company for $865 million in cash. Miller Electric, a leading electrical contractor in the Southeastern U.S., is expected to generate approximately $805 million in revenue and $80 million in Adjusted EBITDA in calendar year 2024.

The acquisition enhances EMCOR's presence in high-growth sectors and expands its electrical capabilities through mission-critical services. The transaction is anticipated to be modestly accretive to EMCOR's earnings per share in 2025, with increased accretion expected in subsequent years.

Miller Electric will operate within EMCOR's Electrical Construction Services segment, maintaining its headquarters in Jacksonville, Florida, with its current leadership team remaining in place. EMCOR funded the acquisition through cash on hand and will discuss it during its Q4 and full-year 2024 earnings release on February 26, 2025.

Positive

• Strategic acquisition valued at $865M expands presence in high-growth Southeast markets
• Miller Electric expected to generate $805M revenue and $80M Adjusted EBITDA in 2024
• Transaction to be accretive to earnings per share starting 2025
• Acquisition funded through cash on hand, indicating strong financial position

Negative

• Significant cash outlay of $865M may temporarily impact liquidity
• Integration costs and risks could affect short-term performance
• Only modest earnings accretion expected in first year (2025)

Insights

Financial Analyst

The $865 million acquisition of Miller Electric represents a well-structured strategic move for EMCOR, with several key advantages. The purchase price at 10.8x projected 2024 EBITDA ($80 million) appears reasonable for a high-quality electrical contractor, particularly given the target's strong presence in the rapidly growing Southeastern U.S. market.

The deal's financial structure is notably prudent - funded through cash on hand, demonstrating EMCOR's strong balance sheet and avoiding additional debt burden. With Miller Electric's projected $805 million revenue contribution, this acquisition will significantly expand EMCOR's Electrical Construction Services segment, which has historically been a strong performer.

Three strategic elements make this acquisition particularly compelling:

• Geographic expansion into high-growth Southeast markets, positioning EMCOR to capture increased infrastructure and commercial construction demand
• Complementary service capabilities that enhance EMCOR's mission-critical offerings, potentially leading to cross-selling opportunities
• Retention of Miller Electric's management team, reducing integration risks and maintaining valuable client relationships

The modest earnings accretion expected in 2025, with increasing benefits in subsequent years, suggests a conservative approach to synergy expectations. This approach typically indicates thoughtful integration planning and realistic financial projections, reducing execution risk.

Market Research Analyst

This acquisition strategically positions EMCOR to capitalize on the Southeastern U.S.'s robust growth dynamics, particularly in key markets experiencing significant data center, manufacturing and infrastructure development. The region's accelerated economic expansion, driven by population migration and business relocations, creates substantial opportunities in the electrical construction sector.

The timing is particularly advantageous given three major market catalysts:

• The surge in data center construction across the Southeast, driven by major tech companies' expansion plans
• Manufacturing reshoring initiatives, particularly in EV and semiconductor sectors, requiring sophisticated electrical infrastructure
• Federal infrastructure spending beginning to flow into state-level projects, creating additional demand for electrical contractors

Miller Electric's established presence in these high-growth sectors, combined with EMCOR's national capabilities and resources, creates a powerful platform for capturing market share. The deal also strengthens EMCOR's competitive position against regional players and other national contractors, potentially leading to improved pricing power and project selectivity.

NORWALK, Conn.--(BUSINESS WIRE)-- EMCOR Group, Inc. (the “Company”) (NYSE: EME) today announced that it has completed its previously announced acquisition of Miller Electric Company (“Miller Electric”), a leading electrical contractor serving high growth areas across the Southeastern U.S., for $865 million in cash, subject to customary adjustments.

The acquisition of Miller Electric increases EMCOR’s presence in high growth sectors and expands the Company’s electrical capabilities through a suite of complementary and comprehensive mission-critical services. EMCOR expects Miller Electric to generate approximately $805 million in revenue and approximately $80 million in Adjusted EBITDA in calendar year 2024. The transaction is expected to be modestly accretive to EMCOR’s earnings per share in 2025, with further accretion in future years.

Tony Guzzi, Chairman, President and Chief Executive Officer of EMCOR, said, “We are thrilled to officially welcome Henry and the Miller Electric team to EMCOR. The addition of Miller Electric marks a meaningful milestone for our company as we advance our goal to broaden our overall construction services platform and offer clients an even wider range of solutions to meet their needs. As one team, we will build upon our Mission First, People Always culture and shared legacies of delivering innovative, high-quality solutions to drive long-term value for our shareholders, employees and clients alike.”

Henry Brown, Chief Executive Officer of Miller Electric, said, “We could not be more pleased to have found such a strong cultural and strategic fit in EMCOR. This acquisition will provide Miller Electric with meaningful resources to accelerate our momentum as we continue to lead the way in serving our clients. I look forward to seeing all we accomplish together in the coming years.”

Miller Electric will operate within EMCOR’s Electrical Construction Services segment under Dan Fitzgibbons, President and CEO of EMCOR Electrical Construction Services. The Miller Electric leadership team will remain in place and Miller Electric will continue to be headquartered in Jacksonville, Florida.

EMCOR funded the transaction through cash on hand and will discuss the acquisition when it releases its fourth quarter and full year 2024 earnings results on February 26, 2025.

Advisors

Evercore is serving as financial advisor to EMCOR, and Ropes & Gray LLP is serving as its legal advisor.

About EMCOR

EMCOR Group, Inc. is a Fortune 500 leader in mechanical and electrical construction services, industrial and energy infrastructure and building services. This press release and other press releases may be viewed at the Company’s website at www.emcorgroup.com. EMCOR routinely posts information that may be important to investors in the “Investor Relations” section of our website at www.emcorgroup.com. Investors and potential investors are encouraged to consult the EMCOR website regularly for important information about EMCOR.

Forward Looking Statements

This press release contains forward-looking statements. Such statements speak only as of this press release, and EMCOR assumes no obligation to update any such forward-looking statements, unless required by law. These forward-looking statements include statements regarding the anticipated financial impact of the acquisition of Miller Electric. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those anticipated (whether expressly or implied) by the forward-looking statements. Accordingly, these statements do not guarantee future performance or events. Applicable risks and uncertainties include, but are not limited to, inability to achieve expected results in revenue and Adjusted EBITDA; inability to realize the benefits of the acquisition to EMCOR’s business; adverse business conditions; the continued strength or weakness of business sectors from which we generate revenue; labor market tightness and/or disruption; productivity challenges; the impact of claims and litigation; the nature and extent of supply chain disruptions impacting availability and pricing of materials; global conflicts; and inflationary trends more generally, including fluctuations in energy costs. Certain of the risk factors associated with EMCOR’s business are also discussed in Part I, Item 1A “Risk Factors,” of the Company’s 2023 Form 10-K, and in other reports filed from time to time with the Securities and Exchange Commission and available at www.sec.gov and www.emcorgroup.com. Such risk factors should be taken into account in evaluating our business, including any forward-looking statements.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250203899318/en/

EMCOR

Investors

Andrew G. Backman

Vice President

Investor Relations

(203) 849-7938

FTI Consulting, Inc.

Investors: Blake Mueller

(718) 578-3706

Media

Joele Frank, Wilkinson Brimmer Katcher

Andi Rose / Viveca Tress

(212) 355-4449

Source: EMCOR Group, Inc.

FAQ

How much did EMCOR (EME) pay for Miller Electric acquisition?

EMCOR Group paid $865 million in cash for the acquisition of Miller Electric Company, subject to customary adjustments.

What is Miller Electric's expected revenue contribution to EME in 2024?

Miller Electric is expected to generate approximately $805 million in revenue and $80 million in Adjusted EBITDA in calendar year 2024.

When will the Miller Electric acquisition be accretive to EME's earnings?

The acquisition is expected to be modestly accretive to EMCOR's earnings per share in 2025, with further accretion in future years.

How did EMCOR (EME) finance the Miller Electric acquisition?

EMCOR funded the Miller Electric acquisition through cash on hand.

Will Miller Electric maintain its current management after EME acquisition?

Yes, Miller Electric's leadership team will remain in place, and the company will continue to be headquartered in Jacksonville, Florida.