Kingsway Announces $5.0 Million Acquisition of M.L.C. Plumbing LLC

Rhea-AI Summary

Kingsway Financial Services (NYSE:KFS) has announced the acquisition of M.L.C. Plumbing (Bud's Plumbing) for $5.0 million, plus transaction expenses and working capital adjustment. The deal was funded through cash and a $1.25 million seller note.

The century-old Bud's Plumbing, based in Evansville, Indiana, contributes $6.0 million in annual unaudited revenue and $0.8 million in annual unaudited adjusted EBITDA. The acquisition marks the formation of Plumbing Holdco (Kingsway Skilled Trades), with Rob Casper transitioning as CEO while current President Mark Corn will remain for a one-year transition period.

Bud's Plumbing, established in 1920, is the #1 Service and Repair plumbing company in its market, serving both residential and commercial customers. The company has earned 'Best of the Best' recognition in the Tri-State area for three consecutive years.

Positive

• Immediately accretive acquisition
• $6.0M annual unaudited revenue contribution
• $0.8M annual unaudited adjusted EBITDA
• Market leadership position (#1 in service and repair)
• Established brand with 100+ year history

Negative

• Additional debt through $1.25M seller note
• Management transition risk with one-year handover period

Insights

Financial Analyst

Kingsway Financial Services' $5.0 million acquisition of Bud's Plumbing represents a strategic expansion through their Xcelerator platform, creating a new entity called Kingsway Skilled Trades. The financial structure combines cash on hand with a $1.25 million seller note, demonstrating a balanced approach to capital deployment while keeping the seller engaged during transition.

This transaction adds $6.0 million in annual unaudited revenue and $0.8 million in annual unaudited adjusted EBITDA to Kingsway's financials. The purchase price implies a multiple of approximately 6.25x adjusted EBITDA, which appears reasonable for an established service business with a century-long operating history.

For context, relative to Kingsway's $204.9 million market capitalization, this acquisition represents about 2.4% of their market value while adding approximately 3% to their revenue base. The explicit statement that the deal is "immediately accretive" signals positive financial impact without a dilution period for shareholders.

The organizational structure is notable - establishing a dedicated holding company (Kingsway Skilled Trades) with Rob Casper transitioning from Operator-in-Residence to CEO suggests this acquisition may serve as a platform for future growth in the skilled trades sector. The one-year transition period for the current president provides operational continuity while enabling leadership transfer.

Business Strategy Expert

This acquisition marks Kingsway's strategic entry into the skilled trades sector through their Search Xcelerator platform. By acquiring Bud's Plumbing, a century-old operation recognized as the "#1 Service and Repair plumbing company" in its market, Kingsway gains immediate market credibility rather than building from scratch.

The formation of Plumbing Holdco ("Kingsway Skilled Trades") signals a deliberate structural approach that extends beyond this single acquisition. Creating a dedicated holding company rather than simply absorbing Bud's Plumbing into existing operations indicates Kingsway is establishing infrastructure for a potentially broader skilled trades portfolio.

The leadership approach demonstrates thoughtful succession planning. Appointing an Operator-in-Residence (Rob Casper) as CEO while retaining the existing president (Mark Corn) for a defined transition period balances fresh leadership with institutional knowledge preservation. This reduces operational disruption risk while setting the stage for future strategic execution.

Bud's Plumbing's recognized market position ("Best of the Best" for three consecutive years) provides Kingsway with established customer relationships and brand equity in a service business where reputation is paramount. The 100+ year operating history suggests proven business resilience through multiple economic cycles, reducing execution risk for the acquirer.

Management to Host Conference Call Tuesday, March 25, 2025, at 5:30 p.m. ET

• Expected to be immediately accretive

• Adds $6.0 million of annual unaudited revenue and $0.8 million of annual unaudited adjusted EBITDA

• #1 Service and Repair plumbing company in its market

• Latest acquisition under the Kingsway Search Xcelerator platform

CHICAGO, ILLINOIS / ACCESS Newswire / March 17, 2025 / (NYSE:KFS) Kingsway Financial Services Inc. ("Kingsway" or the "Company") today announced the formation of Plumbing Holdco LLC ("Kingsway Skilled Trades") and the acquisition of the privately-held M.L.C. Plumbing LLC d/b/a Bud's Plumbing ("Bud's Plumbing"), a 100+ year old service and repair plumbing company serving residential and commercial customers for $5.0 million, plus transaction expenses and a working capital adjustment, in a transaction funded with cash on hand and a $1.25 million seller note. Operator-in-Residence ("OIR") Rob Casper will be transitioning into the day-to-day operating role as CEO of Kingsway Skilled Trades following the transaction, while Mark Corn will stay on as President of Bud's Plumbing for a one-year transition period.

Management will host a conference call Tuesday, March 25, 2025, at 5:30 p.m. ET to discuss the transaction.

J.T. Fitzgerald, Kingsway President and CEO, said, "The formation of Kingsway Skilled Trades and the acquisition of Bud's Plumbing aligns nicely with our growing Xcelerator portfolio. Bud's Plumbing has proven itself over the past century as a trusted, reliable and honest partner for its residential and commercial clients through its dedication to quality workmanship and we intend to maintain the delivery of outstanding benefits to the company's customers. Rob's background and professional experience are uniquely suited to building a much larger Skilled Trades platform through a combination of organic growth and future acquisitions."

Bud's Plumbing & Repair Service, established in 1920, has been a cornerstone of the Evansville, Indiana community for over a century. Renowned for their reliable, honest, and hardworking approach, they offer a comprehensive range of plumbing services, including emergency repairs, drain cleaning, water heater installations, and water treatment solutions. Their commitment to upfront pricing and customer satisfaction has earned them recognition as the "Best of the Best" in the Tri-State area for three consecutive years.

Rob Casper, Kingsway Operator-in-Residence and newly appointed CEO, said "I'm excited to join the Bud's Plumbing family. This team has been keeping the water flowing smoothly in Evansville for over 100 years. Their dedication to honest, top-notch service is something I deeply admire. I can't wait to roll up my sleeves and work alongside these fine folks to continue delivering the quality and reliability our community has come to trust."

Mark Corn, President of Bud's Plumbing, shared "We are thrilled to be partnering with such a reputable company and confident that this will lead to a successful future. We look forward to working with Kingsway and continuing to provide great service to our customers."

The transaction was structured as a purchase of all the issued and outstanding membership interests in M.L.C Plumbing, LLC. Holland & Knight LLP served as legal counsel to Kingsway.

Conference call information will be provided in advance of March 25, 2025.

About the Company

Kingsway is a holding company that owns or controls subsidiaries primarily in the business services and extended warranty industries. The common shares of Kingsway are listed on the New York Stock Exchange under the trading symbol "KFS."

The company serves the business services industry through its operating subsidiaries within its Kingsway Search Xcelerator ("KSX") segment:

B2B Services

• Ravix Group (ravixgroup.com), CSuite Financial (Csuitefinancialpartners.com)

• Image Solutions (istechology.com)

Healthcare Services

• Digital Diagnostic Imaging (ddimagingusa.com)

• Secure Nursing Services (securenursing.com)

Vertical Market Software

• Systems Products International (spisoftware.com)

Kingsway Skilled Trades

• Bud's Plumbing (budsplumbing.com)

The company serves the extended warranty industry through its operating subsidiaries within its Extended Warranty segment:

Auto Warranty

• IWS (iwsgroup.com)

• Penn Warranty (pennwarranty.com)

• Preferred Warranties (preferredwarranties.com)

HVAC/Facility Warranty

• Trinity Warranty Solutions (trinitywarranty.com)

Additional Information

Additional information about Kingsway, including a copy of its Annual Reports can be accessed on the EDGAR section of the U.S. Securities and Exchange Commission's website at www.sec.gov, on the Canadian Securities Administrators' website at www.sedar.com, or through the Company's website at www.kingsway-financial.com.

For Investor Inquiries:
Hayden IR
James Carbonara
(646) 755-7412
james@haydenir.com

For Company Inquiries:
Kingsway Financial Services Inc.
Kent Hansen, CFO
(312) 766-2163
khansen@kingsway-financial.com

SOURCE: Kingsway Financial Services, Inc.

View the original press release on ACCESS Newswire

FAQ

What is the acquisition value and structure of Kingsway's (KFS) purchase of M.L.C. Plumbing?

Kingsway (KFS) acquired M.L.C. Plumbing for $5.0 million plus expenses, funded through cash and a $1.25 million seller note.

What revenue and EBITDA does Bud's Plumbing bring to Kingsway (KFS)?

Bud's Plumbing contributes $6.0 million in annual unaudited revenue and $0.8 million in annual unaudited adjusted EBITDA.

How will the management transition work in KFS's acquisition of Bud's Plumbing?

Rob Casper will become CEO of Kingsway Skilled Trades, while current President Mark Corn will stay for a one-year transition period.

What is the market position of Bud's Plumbing in its service area?

Bud's Plumbing is the #1 Service and Repair plumbing company in its market and has won 'Best of the Best' in the Tri-State area for three consecutive years.