Willdan Signs Agreement to Acquire Lime Energy

Willdan Group, Inc. (NASDAQ: WLDN) and Lime Energy Co. (“Lime Energy”) announced today that Willdan has signed an agreement and plan of merger (“the Merger Agreement”) to acquire all outstanding shares of Lime Energy. The total purchase price of this acquisition is $120 million in cash, subject to customary holdbacks and adjustments. Willdan expects the acquisition of Lime Energy to close during the fourth quarter of 2018.

The $120 million purchase price equates to approximately ten times Willdan’s estimate of Lime Energy’s anticipated Adjusted EBITDA for 2018, and Willdan anticipates that Lime Energy’s 2018 revenue will be approximately $145 million.

Lime Energy designs and implements direct install energy efficiency programs for utilities that target energy savings for commercial customers. Lime Energy’s programs help these businesses use less energy through the upgrade of existing equipment and installation of new, more energy efficient equipment. This service allows utilities to delay investments in transmission and distribution upgrades and new power plants, while cost-effectively complying with increasing environmental regulations. These programs benefit utilities’ customers by lowering their energy bills, improving equipment reliability, reducing maintenance costs, and improving electric grid operations. Lime Energy has delivered energy efficiency programs for 10 of the 25 largest electric utilities and five of the 10 largest municipal utilities in the U.S.

Willdan believes the acquisition of Lime Energy will further expand Willdan’s presence in the energy services market and enhance Willdan’s offerings. The acquisition of Lime Energy will provide Willdan the opportunity to diversify Willdan’s geographical presence, including in the southeastern and mid-Atlantic regions of the United States where Willdan currently has limited operations. The transaction will also expand Willdan’s utility customer base, as Lime Energy delivers energy efficiency programs to some of the largest electric utilities that are not currently Willdan’s clients. In addition, Willdan believes that the acquisition of Lime Energy will better position Willdan to take advantage of the anticipated upcoming expansions in energy efficiency budgets and contracts in California and the Northeastern United States.

Willdan will host a question and answer session by conference call to discuss the transaction on Tuesday, October 9, 2018, at 4:30 p.m. Eastern/1:30 p.m. Pacific. Interested parties may participate in the conference call by dialing 877-260-1479 and providing conference ID 5792163. The conference call will be webcast simultaneously on Willdan’s website at www.willdan.com under Investors: Events and the replay will be archived for at least 12 months. The telephonic replay of the conference call may be accessed following the call by dialing 888-203-1112, conference ID 5792163. The replay will be available through October 23, 2018.

Willdan also announced today that it has entered into a new credit agreement with a syndicate of BMO Harris Bank, N.A. (“BMO”) and MUFG Union Bank as lenders and with BMO as administrative agent. The new credit facility provides for up to a $90 million delayed draw senior secured term loan, subject to certain conditions that must be satisfied prior to any borrowings (including the completion of the acquisition of Lime Energy), and a $30 million senior secured revolving credit facility, each maturing on October 1, 2023. The new credit facilities replace Willdan’s existing credit agreement with BMO, which has been in place in various forms since 2014.

The descriptions of the Merger Agreement and new credit agreement above do not purport to be complete and are qualified in their entirety by reference to the Merger Agreement and the new credit facilities, which will be filed as Exhibits 2.1 and 10.1, respectively, to Willdan’s Current Report on Form 8-K to be filed with the Securities and Exchange Commission today.