EMCOR at Morgan Stanley Conference: Strategic Growth Insights

On Friday, 12 September 2025, EMCOR Group Inc (NYSE:EME) participated in the Morgan Stanley 13th Annual Laguna Conference, presenting a strategic overview of its operations and financial strategies. While the company highlighted its strong adaptability and growth in high-demand sectors, challenges in the regulatory environment and workforce retention were also addressed.

Key Takeaways

• EMCOR is focusing on high-growth sectors such as data centers, reshoring, and healthcare.
• The acquisition of Miller Electric aims to expand EMCOR’s electrical services in the Southeast.
• EMCOR maintains a balanced approach to capital allocation, prioritizing reinvestment and shareholder returns.
• Safety and a values-based culture are central to EMCOR’s operational strategy.
• The company projects revenue guidance between $16.3 billion and $16.9 billion for the year.

Financial Results

• EMCOR’s core business in skilled trades, including mechanical and electrical services, represents 70-75% of the company.
• The company generates cash equal to or above net income, with a capital allocation strategy of 10% for business growth and 40-50% for shareholder returns and acquisitions.
• Revenue from data centers has more than doubled from 2020 to 2025, significantly contributing to growth.

Operational Updates

• EMCOR is strategically investing in regions like the Southeast, Mid-South, and Southwest to leverage reshoring trends.
• The company’s healthcare sector has seen a 40% increase in revenues year-to-date.
• EMCOR operates with 100 subsidiary CEOs empowered to make local decisions, fostering a decentralized management approach.

Future Outlook

• EMCOR plans to continue expanding its presence in data centers, with a focus on electrical expansion.
• The company is adapting to regulatory changes, especially in the power sector, where engineers are focusing on base load and latent power.
• EMCOR’s workforce strategy emphasizes training and retention, aiming for a headcount growth of 3-3.5% alongside a revenue CAGR of 9.5-10%.

M&A and Capital Allocation

• The acquisition of Miller Electric is a strategic move to enhance EMCOR’s capabilities in electrical services.
• EMCOR’s M&A focus includes companies in electrical, mechanical construction, and mechanical service sectors that align with its values.
• The company avoids high leverage, maintaining a disciplined approach to capital allocation.

For further details, readers are encouraged to refer to the full transcript of the conference call.

Full transcript - Morgan Stanley 13th Annual Laguna Conference:

Operator: All right. I think we’re ready.

Will Dodson, Investment Banking Division, Morgan Stanley: Great. Well, I’m Will Dodson from the Investment Banking Division of Morgan Stanley, and I’m delighted to introduce a first time participant in the conference, EMCOR. The management team is here. We’ve got Tony Guzzi, who’s Chairman, President and CEO of the company Jason Albandian, who’s the Chief Financial Officer and Andy Bachman, Vice President of Investor Relations. So welcome to Laguna.

We are thrilled to have you guys here. Since it is your first time, Tony, maybe for you, why don’t you start out and just give us a little perspective on the EMCOR story, talk a little bit about your businesses, acquaint the group with what’s going on at EMCOR.

Tony Guzzi, Chairman, President and CEO, EMCOR: Yes. So, if you just take it at the top level, EMCOR is a company where we actually do the work, right? So we’re a company of plumbers, pipe fitters, electricians, sprinkler fitters, HVAC technicians and operating engineers. So said simply, we’re a skilled trades company. Highly trained people, sort of if you look at trades, we’re up here at the top of the food chain.

So we’re looking to either build something, fix something, retrofit it, and then do ongoing maintenance. If you look at the company today, we have a mechanical and electrical segment, the give or take makes up 70%, 75% of the company. We have a building services segment that the mechanical services business in that is about 370%, 75% of the revenues of that business and the other stuff is site based where we have people actually running buildings or doing raw technician work. We have an industrial business which is a bit of a misnomer, it’s really our oil and gas business. Mostly focused downstream doing mechanical work and some electrical with some midstream and upstream.

And then we have a business in The UK that’s really a facility services business. The common theme across all of it is go back to my opening comment. The people that work in each one of those segments are by and large doing the same kinds of things, just whether they’re doing a large construction project, a retrofit job or a ongoing maintenance contract. Now if you think about overall, at our heart we’re contractors. So that by definition, we’re flexible, we adapt and we don’t really create demand, little bit in the aftermarket we create demand, we react to demand.

And we have to have our company positioned to be able to execute for our customers. In a lot of ways, we do control the mix of what we work on, but how we’re going to apply our resources. The other part about EMCOR that’s core to who we are is this is a values based company. We very much believe in values of mission first people always. We believe on the mission first side, there’s things like integrity, discipline, transparency.

Think about what we do. We wake up today, Jason and I and our teammates have people working on at least 12,000 customer sites, doing fairly dangerous stuff in some cases. These are guys that are at the tip of the said screwdriver, have welding torches in their hand, they’re working in dangerous facilities, lots of heavy equipment around them. The other part of our thing is people always, right? We do operate in an environment of EMCOR mutual respect and trust.

Secondarily, safety is a core value. We are six sigma in safety compared to the rest of the industry. We operate at a TRIRR of less than one. And then finally, we very much believe in teamwork. If you think about how we run the company, we have those segments, but how we actually run the company is a combination of how you would run three types of companies.

At the top of EMCOR, our top 150 to 200 people give or take feels very much like a professional services firm. And that might seem odd to you, but they are our partners. We operate through 100 subsidiary CEOs. We want them to feel empowered to make decisions at the local level and project level and that we knitted it all together at the segment and corporate level. But they are my partners, they’re Jason’s partners, they’re Andy’s partners.

These are very sophisticated business people, about 60% of them grew up in the trades and they’re running businesses up to 1,000,000,000 right now. Great story, great American story. The next part is we very much and I think this is what distinguishes us from other people in our space is we run this like an industrial company. That’s my background. Twenty years ago, we run this like an industrial company.

This is very metrics driven company. And you see that through our cash conversions, up cycles, down cycles, no growth cycles. We typically generate cash at least equal to net income or a little bit above. And again, that’s not common with all contractors or people in the services industry. And then finally, in some ways we look like a platform private equity investor because we have four or five places we relentlessly invest to grow our footprint geography wise, capability wise to be able to do what we need to do for a customer in both an end market and a geographic market.

Now you think about what’s driving our business today, we didn’t wake up one day and say, we’re going to be great data center builders. We had built the skills to do that over a long period of time, including we built some of the first data centers in the early 2000s. There’s a little bit of resurgent around 2012 or 2013. But what we learned is, and we knew this, is good industrial electricians and pipe fitters and HVAC people are flexible once they get the rhythm down on that job. And that’s what’s allowed us to go from serving twenty nineteen three data center markets electrically and through their search for power to be able to expand, give or take 15 today.

And that’s why mechanically we went from servicing one or two to four or five today, a little different. And then fire life safety, we can serve every data center market in the country. And so we also are pretty good at capital allocation. If you look at us over a very long period of time, about this much has to go in, maybe 10% goes into growing the business because we’re not a capital intensive business. 40% or 50% we return to the shareholder, mostly through stock buyback, a little bit through dividend, and the other 40% or 50% has been through acquisition.

That’s a little overview of who we are. We run lean. We have a corporate office that maybe has 100 people in it. And we’ve been able to grow the company to where this year we think we’ll do somewhere between 16,300,000,000.0 $16,400,000,000 and $16.8 $16,900,000,000 of revenue.

Will Dodson, Investment Banking Division, Morgan Stanley: So that’s a super overview and I definitely want to come back to the capital allocation piece. But why don’t we start macro? One of the very interesting things about the story is the growth drivers that you sit in the middle of right now. Clearly, at the conference, we’ve talked a lot about data centers. We’ve talked a lot about reshoring.

We’ve talked a lot about electrification. So I think those are probably I’ll you explain the nature of those drivers and then give your perspective on where they’re going. Jason and I are going to sort

Tony Guzzi, Chairman, President and CEO, EMCOR: of do this together. I’ll talk here and he’ll tell you what that’s meant in our business as So far as we always thought that if you had bought and expanded your company and did the right training and you built the best supervision and the best training programs with the union and outside of the union for your trade workers that you would win. That’s been sort of one of the thesis of the company on time, we’re long term investors in leadership development. But if you take those trends and you pull them apart, maybe just because of my bent on the world, I’ve sort of never been a big China bull, I sort of guessed that there would be reshoring happening at some time for a lot of geopolitical reasons, right. I’m sort of the guy that would Will has been in those meetings in another setting.

People would say, hell, this is all going happen. I said, yes, there’s one part that just doesn’t make sense. Would you have invested in the Soviet Union in 1975? These are discontinuous political systems and we’ll have a hell of a time working together. So our answer to that over a long period of time on the reshoring front was to invest like crazy and build a footprint where we didn’t have one in the Southeast, Mid South and Southwest.

We had if you’ve been in the EMCOR in 02/2007, we almost had no presence. We were California, the Northeast, a little bit the Midwest, but we didn’t have any presence in the Southern United States. So our guess was that’s where it was going to happen when it happened. We started seeing it happen sort of 2015, 2016, 2017, you started to see it. And then of course COVID started an accelerant because I guess we figured single source supply that used to be chapter and verse in 2000 to 02/2008, we sort of figured single source supply out of one plant with a complicated supply chain probably wasn’t a good thing.

And so it’s going to come back it is coming back with a lot more automation and it is happening exactly where we thought it would happen. With the addition really of Ohio, Indiana, Iowa and some Midwestern states. That’s the reassuring trend and Jason we see that in our backlog and our revenue growth, right? Yes. If you look at our remaining performance obligations,

Jason Albandian, Chief Financial Officer, EMCOR: which for us is really just a measure of backlog, if you look at our traditional manufacturing, can see we’re up almost 30%, a little over 30 year over year, and that’s what we’re seeing from that manufacturing and reshoring.

Tony Guzzi, Chairman, President and CEO, EMCOR: And if you took it over five or six year window, it’s probably high single digit CAGR? For sure.

Jason Albandian, Chief Financial Officer, EMCOR: Right. I think the thing about us, right, is data centers are definitely a big contributor to our growth, particularly if you just look at this year through the 2025, where we more than doubled our data center revenues. But our markets are more diverse than just data centers. I think if you look through the broader company, our healthcare revenues, for example, are up 40% year to date. We touched on manufacturing and industrial work.

Our water and wastewater RPOs as well are up 20%. So, fairly diverse. And I think the thing that we often look at is, if you boil down the rest of our business and you take out the high growth market sectors and you strip away data centers and you strip away high-tech manufacturing, we’re still growing mid single digits, let’s call it 4%, 4.5% if you look over 24% or 20 when

Tony Guzzi, Chairman, President and CEO, EMCOR: you five strip that out of non res, you’ll see that we’re growing above non res about twice, couple of 100 basis points. And then you go to data centers, it’s interesting because there’s been this disconnection of thought and I’m going to tie it to what I think is, I would call it electrical expansion, not electrical. I’ve never been sort of the electrification guy. I’ve been more the we need more power guy. And maybe I had our team here had a unique seat at that because we knew what people were thinking about as far as data centers and semiconductors and manufacturing plants.

And then you sort of put that against what people were talking about energy supply, especially from like 2021 to 2023 or like, this doesn’t work. You’re going to need more baseload power, you’re going to need more fossil power, nuclear is at least ten years away. So when you go to so let’s just focus on data centers. We’re pretty good at it. And we’re only good at it because of all those things we talked about before, the training, the development, the execution in the field through our subsidiary companies, the way those 10 or 12 ms core companies that really service the data center market, how they work together, how they figure out how to take a customer from Virginia to Southern Washington and how they work together to make sure we get to the best answer for our customers.

And I don’t think a lot of companies can do that because it’s our culture. You go back to that values culture that drives us to work together, we trust each other. And contracting in the end or people business like ours is a lot about trust, right? So our teams have to trust each other that they can execute for the customer. And then you start thinking about the tools whether it be for reassuring will, whether it be for data centers, whether it be for healthcare, the essential tools are essentially the same.

To do these complex jobs you have to be really good at virtual design construct. You have to be able to integrate yourself back earlier into the process, I wouldn’t say we’re doing design, but we’re finishing the design for constructability and taking the lessons learned and helping our end customer, the owner for the next build be able to do value engineering. And so we do a lot more design assist than we ever have. And you start thinking about the skills you need to do those big projects, those complicated projects are really the same. It’s just what market you’re going to apply them to.

And so we went from having give or take a couple of 100 BDC people, virtual design construct people that actually working in rooms like this, spread out, designing things and then in trailers. But we have about 1,500 today. If you look at our headcount growth, right, in our construction businesses, which is 70% of the company give or take, Our headcount is growing our revenues are growing mid teens to 20%. Our headcount is growing a third of that. So you take that virtual design construct and then you put it into fabrication and that allows you to take hours out of the field, it allows speed to market to happen, you get less airs, you put a spattering on top of that at better contractual terms.

Today, we’re buying less equipment mainly because of COVID and supply chains, the owners are buying more to themselves and you see what the effect can be on our margins.

Will Dodson, Investment Banking Division, Morgan Stanley: Talk, Tony, about the regulatory environment is clearly shifting and has been moving over the last not just the last nine months, but certainly over the last several years. Lots of different legislative initiatives. Talk about what you’re seeing today, how that affects execution today and where you think demand grows as a result of some of these things?

Tony Guzzi, Chairman, President and CEO, EMCOR: Again, think by nature because of who we are, we just call it different play depending on the regulatory environment. We act very quickly. Actual regulatory environment, you can argue they were pushing and pulling at each other over the last couple of years, People ask me, when do you do better, I don’t know if you do better with Democrats or Republicans and I shrug my shoulders and go, I have to do well with both. And our construction workforce is mainly union, service workforce is probably fifty-fifty. And construction unions other than most of you are probably from New York or California or Chicago, that’s a different world than most of the construction unions around the country.

The way construction really works is we work with partners with them, we build the bench, we train people, we recruit people with them, we try to get to the right mix of workers on the job so we can be competitive. So you’d say under a democratic administration because there’s more Davis Bacon work, when they wrote the Chips Act they made it more favorable to union contractors, all those things. Okay, it’s great. Those jobs are going to be done that way anyway. 70% of the labor on those kind of jobs are probably going be union, mainly because of the upskilling, right, a lot of skill.

And we can put together workforce because the union guys from Michigan can come down to Texas to work and check into the book there. And I don’t want to get into a whole force on that right now. So you say okay, that’s better and some of laws were more favorable. But then you get into okay what’s favorable now, well permitting is a little easier probably, a lot of people want to build gas pipelines right now, so we’re going do some compressor stations. The power sector is more thoughtful I would say right now.

The engineers are back in charge of that, the people that actually understand the energy industry and what it takes to base load a grid, what latent power really means in a grid to keep it running, What it takes to power data think about a data center, think about regulation. Data centers went from being ten, twenty megawatts when we were building for people like Morgan Stanley or JPMorgan 02/2005, 02/2006. Then we started building these cloud storage data centers, which are still growing high single digits. And they were fifty, forty, 70 megawatts. Folks, that’s a lot of power.

That’s one fifth of a turbine output of a GM, a GE LM8000, right. And now, cloud storage is sort of getting up to 100 megawatts, AI is about 200 to 300 megawatts. So let’s put that in perspective for you. 200 megawatts, how many houses? Households, about let’s say four people in a house.

200 megawatts probably power somewhere the power needed for 15,000 to 20,000 people, so mid sized town, small town. Let’s talk about a data center cluster like they’re building down in Georgia. It will be a mix of AI and cloud storage, don’t understand how all that works. We just build them and service them. But I know the one that’s probably AI is 200 megawatt with liquid cooling.

And I know the one that’s doing the cloud storage is about 50 or 100 megawatt. That campus, campus we somewhere between 2,203 megawatts or if you’re a power guy they say two to three gigs. Think about that. The nuclear plant they put in Georgia, I think that’s somewhere around 3,200 to 3,500 megawatts. So that one data center site is going to take the output of that entire nuclear plant that was built and took ten years to build.

So why are we servicing 14 or 15 data center markets now? Because they’re looking for stranded power. That’s why we’re in South Bend, Indiana. That’s why we’re in Fort Wayne, Indiana. That’s why we’re on the Indiana side of Lake Michigan where the steel plants used to be.

That’s why Columbus, Ohio can boom. Why? Today, our connectivity, probably the best connectivity outside of DC, coupled with Ohio River Valley coal and gas. To get that same 200 megawatts solar, which is intermittent power, to get that same 200 megawatts with the solar field, if you’ve ever been to an industrial solar field, I’d charge you to go. Anybody have a guess how many acres it takes?

God, yes. 1,500. So get the power to power that one data center site, that one data center site in Georgia. And to do it with solar, by the way, you have to build gas backup. But to do it with solar, just do the math.

15,000 to 25,000 acres. So that’s why you can’t book a gas turbine right now through 02/1931. I do think though when you go to electrification, it’s interesting when you talk to utility executives which we do, when you talk to people, I do think it’s back to density of power argument which is sort of favors, I think it’s going be gas and then nuclear some. And that’s the electrification that’s going to take place. And if you think about a data center, it’s a great microcosm of how you think about battery power and everything else.

A data center dedicates about 15% to 20% of its square footage to the battery room or the UPS. How long does that UPS typically run that data center until the diesel generators kick off? Anywhere from seven to fifteen minutes. That’s about where battery technology really is as far as density. So a lot going to go on.

The good news is we’re contractors. We’re going to react to whatever demand is out there. We’re pretty good solar field developers I mean builders, not developers. And I think it is going to be all of the above, but you’re going to have to gravitate more towards base load power or else we can’t power these AI data centers. And then if you start thinking about places like New York, they’re going to have to figure out what they’re going to do for power because you’re going to need response AI data centers just outside the city because with what you do, lot of you, that split second is going to mean something just like it does in high speed trading.

And when we talk to our customers and you think about demand whether it be a chip manufacturer, whether it be a reshoring person and especially the data center people, what they have planned for the next three to five years to just keep up with demand both cloud and AI is stunning. As far as the power draw that’s going to have to happen. So long winded answer.

Will Dodson, Investment Banking Division, Morgan Stanley: Super helpful. Think one thing I wanted to shift and talk about it was workforce strategy. There are two questions in here. One is availability to support all the growth.

Tony Guzzi, Chairman, President and CEO, EMCOR: And then

Will Dodson, Investment Banking Division, Morgan Stanley: second, related to the growth, as you scale, how do you keep standards high? Obviously, talked about safety and the culture. Does that work as you’re getting so much bigger?

Tony Guzzi, Chairman, President and CEO, EMCOR: Yes. So the only way we can keep the culture is through our supervision. So we spend a lot of time training supervision. So I’d sort of start with a macro view and then Jason will back me up with some numbers on how our workforce has grown versus revenue and all that on concrete terms. Someone asked me a really good question right after first quarter earnings we were at an investor conference like this and I’d never thought of this question this way.

And they said, yes, Tony, Jason, Andy, how do you ensure that you have the A team on every job? And I think reflexively I wanted to answer, oh yes, here’s how we get the A team But I took a step back and I said we can’t do that. Otherwise we can’t build capacity, right? And our customers want us to build capacity, especially at the supervision level.

And we typically try to average to a B to B plus on a job. And maybe our B or B plus looks like it’s better than a lot of because the way we’re growing is probably better than a lot of other people’s A. Sure, have 80 guys on every job that matters and gals, and then we have to expand our workforce. We do a lot of recruiting. Diversity of our workforce really expands every year because we find the people.

And if we can get a good mix on that job, we can create another team, right? So our foreman might be a C plus on that job or a couple of them, but they’re working with a superintendent across multiple jobs and a project executive that are A players. Likewise on other jobs we may have a higher mix of foremen that are A players. And the whole magic with what we do from workforce development Will is to be able to build more foremen and more superintendents and project managers. And you think about why we have been successful recruiting really skilled tradespeople or having people come from other careers into the trades, I think it comes down to three four things.

And someone just initiated coverage on me, I think they copied what I’ve been saying for like ten years, They must have listened to the calls, because I say it on every call. Why does somebody come to work for EMCOR that started the trades level versus another company? I think the first reason they come is they’re going to get paid every week. Sounds simple, right? And these are no particular order.

That sounds simple, I’m going get paid. That’s not true with all contractors. And if you’re a union contractor, they’re actually going pay into my benefits fund too, you’re going keep current. They’re going get paid with them core companies and we’re going to pay the benefits too. The second thing is they do dangerous things.

On any one of our job sites, see things moving around all over the place planning, these guys are expert planners, the foremen are planning that work with our superintendents, with our project managers to keep people safe, that’s the first condition. So I want to know that you’re investing in the best safety equipment, something as simple as do I have the right hard hat as technology develops there, are you going to give me the right safety gloves, are you going I mean everything, fall protection and they always have that. As I’ve never told people that let’s go do a competitive bid on safety equipment, whatever our guys think are right for that local condition they buy. The third thing is, if I want a career, not everybody wants a career, right? But if I want to advance, am I in a company that offers me the change to advance?

And am I working for people that actually know what they’re doing at the field level? Go back to my point that especially in the electrical business, a big 80% of our people that run our electrical companies started in the trade, mechanical is about 50%, if they weren’t that they were engineers or project managers. Our folks in the field know the work. And then finally, if I do a good job for you, am I going to be part of your ongoing crew and are you going to have work going forward? And then make some hard numbers, Jason.

Jason Albandian, Chief Financial Officer, EMCOR: Yes. So Tony touched a little bit on the investments we made in our fabrication capabilities, our capacity, construction tools we’re using, VDC and BIM. And so over the last several years, we’ve really invested in those technologies to make us more productive and more efficient and allowing us to do more with less labor. And so if you look over, let’s say, a five year period, when our revenue is growing at a CAGR of 9.5% to 10%, our headcount growth is only 3% to 3.5%. So revenue is outpacing headcount growth almost three:one.

And I think that’s telling to some of the efficiencies we’ve been able to gain on our projects.

Tony Guzzi, Chairman, President and CEO, EMCOR: And then if you think about retention, because we can’t retain all the trades people because work goes like this in a local market. We’re trying to retain a core, so what do we do? We train, right? In any given year, we’re bringing somewhere between one hundred and twenty five and one hundred and fifty ms Corp leaders out of the field at multiple levels in the organization. We’re training at the frontline level in a centralized way anywhere from 20 to 40 form a year, 20 to 40 project managers where they actually learn how to lead, right?

They know the means and methods, we can train that at the local level, we do that through peer groups. But they learn how to actually build a workforce, retain people, create the environment that people want to work in. Then we have a second course where we bring about 40 people out of the field a year, CFOs, project managers, a couple of superintendents, some people we think maybe CEOs someday, or senior executives in our subsidiaries. There we teach them about how you actually run this business economically. And Jason teaches part of that himself, I do, and we do it through a case study, and we do that down at where we were at BAPS, now we’re going do at Georgia Tech.

And that’s on, okay, now you need to understand the language of our business. I’ll think about contracts, that. Then we have our Capstone, which is up at West Point at their leader development, we’ve been doing it about twelve years. We’ve trained about five fifty people. And that is okay, now you’re the senior leader, what does that really mean?

And if you look at retention through people that have been through our courses and like the middle the top two we’ve had for ten plus years, our retention of our key leadership other than retirement is north of 85%. So people aren’t stealing people from us, they’re trying, but our people want to stay. And I think they see the workforce development, they see the opportunity, they see that we have an operating model, we also have an MCORE operating model that basically says, if you don’t have a better answer, you decentralize and you centralize where it makes sense and where you can get scale. And that creates this push and pull between entrepreneurship and discipline and process control that I think we’ve done extraordinarily well over a long period of time.

Will Dodson, Investment Banking Division, Morgan Stanley: Great. Think I wanted to wrap up on the M and A piece of capital allocation. So you did a big deal earlier in the year. Why don’t you give an update on the Miller Electric acquisition and then talk about M and A roadmap going forward, at least as you see it?

Tony Guzzi, Chairman, President and CEO, EMCOR: Jason, maybe hit some of the top numbers, what our allocations look like over the last Yes.

Jason Albandian, Chief Financial Officer, EMCOR: So for us, and Tony touched on this a little bit, right, capital allocation for us is very balanced. We have fairly disciplined approach. We’re not prioritizing high leverage. We’re seeking to maintain liquidity. And over a long period of time, if you look, let’s say, ten years, eight years, we really are fairly balanced.

We’re almost fifty-fifty between business reinvestments, so the M and A and CapEx and shareholder return.

Tony Guzzi, Chairman, President and CEO, EMCOR: So Miller, Henry Braun and his team, I mean, they’re known as one of the best electrical contractors in the country. We didn’t have a big Southeast presence electrically. It’s a third generation family company that has grown really well. So when we think of acquisition so big picture, we’re going to invest what we know how to do. Our preference would be electrical mechanical destruction and mechanical service or building control.

That’s where we’re going to invest, right? There’ll be some stuff on the fringes like tuck ins, but that’s where we invest. The miller is pretty much the perfect deal for us. We’re not on a company like that, we’re not looking to make a bargain, but we’re not also looking to be in a heated battle with private equity that has no idea what they’re buying. This is a complicated buy in our business.

So I started talking in 2019 to Henry about working together. And we hit the right moment when it made sense for both of us. He wanted to keep growing, it was getting a little bigger than what the family was maybe comfortable with and off we go. There was no other person on that deal, he was either selling to us or keep growing his company. Bachelor and Kimball is very similar, we bought that in 2019, great mechanical contractor in Atlanta and parts of the Southeast.

Brian Bachelor was running the company and his father, same kind of situation. And obviously, this went well because now Brian is the CEO of our mechanical segment. And so when we look at a company of size like that, any company we look at can the first thing we look at is can they execute in the field. If they have a bad reputation in the field, we’re not going to try to fix that. We would rather just move on.

Because if don’t know basic means and methods, that gets really complicated. On the smaller ones, if they aren’t disciplined in the back office and all that, I’m talking like 30,000,000 purchase price and below, we can usually work with them to fix that, or we just make them a branch of one of our bigger companies, we can figure that out. On the bigger ones, we actually go to a whole different level. If you and I don’t share the same values and you’re going to run a company for us, which they are going to run it for us, we’re not buying you. I don’t care how much money you make, because it’s not worth the reputational risk to our company.

So we start in the field and we go to the leadership and then we get a mesh and we buy a company. Very rarely are we in an auction, almost never. They may have an intermediary to help them do the deal because that’s the first one they’ve ever done. But very rarely in an auction and quite frankly, we’re pretty good buyers and I’m pretty tough grader. I’d say we’re a good B plus student in M and A.

Will Dodson, Investment Banking Division, Morgan Stanley: All right. We’re at time. We’re delighted you guys joined us. So thank you for being on the first time and congratulations on the S and P Thank five you.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.