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According to the company, the plan contemplates that the Residential Services Group of Encompass, which specializes in installing and servicing HVAC and plumbing systems in newly constructed and existing homes, will be reorganized as a new entity. The company will be headquartered in Dayton, Ohio, with operations in nine states.
The reorganization plan is supported by an investment from Wellspring Capital Management, a New York-based private equity firm. Encompass reports that the agreement will result in Wellspring and the Residential Services Group management team owning all outstanding shares of the new entity established to carry forward the business.
“Upon confirmation of the plan, our new company will be focused exclusively on residential services,” said Eric Salzer, who is the designated chief executive officer of the new organization. “We see tremendous potential for developing this business going forward.”
According to Carl Stanton, partner, Wellspring Capital Management, the company will be positioned for solid growth and profitability when the plan is completed. “This business has an experienced management team, a diversified customer base, and a proven financial track record. We are excited to be associated with the Residential Services Group,” he said.
Encompass stated that it has completed the sale of substantially all of the company’s assets outside of the Residential Services Group pending the case.
Said Michael F. Gries, chief restructuring officer of Encompass Services, “We expect to emerge from Chapter 11 in the second quarter of 2003.”
Publication date: 03/17/2003