Linc Group Frees Itself in Management Buyout

BY ROBERT P. MADER Of CONTRACTORs staff HOUSTON The last of the mechanical contracting businesses attached to Enron has emerged through a management buyout. Management of the Linc Group and private equity firm GI Partners have purchased the company. Enron Energy Services formerly owned The Linc Group entities, most recently known as ServiceCo. Terms of the acquisition were not disclosed but were approved

BY ROBERT P. MADER

Of CONTRACTOR’s staff

HOUSTON — The last of the mechanical contracting businesses attached to Enron has emerged through a management buyout.

Management of the Linc Group and private equity firm GI Partners have purchased the company. Enron Energy Services formerly owned The Linc Group entities, most recently known as ServiceCo. Terms of the acquisition were not disclosed but were approved by the Enron bankruptcy court in November.

The Linc Group has four operating companies: Affiliated Building Services, Linc Corp., Linc Service Holdings and Integrated Process Technologies. Collectively, The Linc Group performs service work in more than 15,000 facilities with a workforce totaling 1,400 employees. The Linc Group generates more than $170 million in service revenue annually.

Linc is no longer related to Limbach Facilities Services, also formerly owned by Enron. Limbach was separated from the other mechanical businesses in September 2002, said Limbach CEO Steve Wurzel. Limbach Facilities Services won its independence in a management buyout on Dec. 13, 2002.

More than 20 years ago, Limbach Constructors, Pittsburgh, had created the Linc franchise as a way of showing new construction contractors how to get into the HVAC service business. Anjou International, a unit of France’s Vivendi, bought Limbach in the late 1980s and sold the company to Enron in the late 1990s.

Wurzel noted that Enron sold a minority interest in ServiceCo to the Ontario, Canada, Teachers’ Pension Fund and, in true Enron accounting fashion, put it on the books as a substantial gain.

“The Linc Group has a long, proud history of providing superior mechanical and facility management services to its customers,” said Rick Magnuson, GI Partners’ executive managing director. “We were highly impressed by Linc’s industry leadership, which is best evidenced by the fact that all major corporate clients remained committed to the business despite the distractions surrounding Enron. We believe The Linc Group is an excellent fit with the innovative focus of our portfolio.”

Tracy Price, CEO and president of The Linc Group as well as the predecessor company ServiceCo, said: “Our employees, customers and non-Enron investors have been looking forward to this day for a long time. While our business operations remained focused throughout, the Enron affiliation was a major distraction. We look forward to further developing the excellent business reputation our companies have enjoyed over their 25-year history by delivering a full complement of mission-critical facilities management services to U.S. businesses.”

Price told CONTRACTOR that the newly formed Linc Group is made up of several parts:

  • Linc Corp. is the franchiser with 100-plus franchisees.
  • Linc Service Holdings is the mechanical service arm, a collection of 10 company-owned franchise firms with 11 physical locations and 280 employees.
  • Affiliated Building Services is an on-site engineering company that provides facility services at places such as JFK International Airport on Long Island, N.Y.; Hartsfield International in Atlanta; semi-conductor maker Applied Materials; and Pac Bell Park in San Francisco. ABS provides personnel who maintain and operate facilities. ABS employees are all on-site and could number as few as three to as many as 100 at an international airport. There are a few regional offices located near clusters of customer sites. ABS would handle full mechanical services, security, fire and life safety. It would subcontract a service such as janitorial. ABS employs 900 and covers 42 states.
  • Integrated Process Technologies provides a call center and benchmarking for facilities services for multi-location retail customers. It acts as a clearinghouse for brokering and managing all outsourced services in 30-plus trades and has major clients such as Blockbuster Video and Exxon Mobil. IPT contracts with independent contractors for everything from mechanical services through painting and makes sure the client gets the best and most efficient service possible.

Price noted that IPT nominally tries to contract with Linc-affiliated companies, “but there hasn’t been a lot of synergy. It’s been termed as random acts of commerce.”

Collectively, current IPT clients maintain in excess of 9,500 site locations with more than 100 million sq. ft. of space.

The Linc Group, along with ABS, is based in a new corporate office in Houston. Headquarters for the other companies’ offices remain unchanged. Linc Service Holdings is headquartered in Atlanta. The Linc Corp. is headquartered in Pittsburgh and IPT is based in Hartford, Conn. More information about the companies is available at their Web sites, www.lincservice.com, www.absfm.com and www.ip-tech.com.

Headquartered in Menlo Park, Calif., Global Innovation Partners is an international private equity fund providing financing for high-growth businesses and technology-related real estate assets in North America and Europe.