Integrated Electrical Services and MISCOR Group Announce Signing of Merger Agreement

  Integrated Electrical Services and MISCOR Group Announce Signing of Merger
  Agreement

Business Wire

HOUSTON & MASSILLON, Ohio -- March 13, 2013

Integrated Electrical Services, Inc. (NASDAQ: IESC) (“IES”) and MISCOR Group,
Ltd. (OTCQB: MIGL) (“MISCOR”), today announced that IES Subsidiary Holdings,
Inc., a wholly owned subsidiary of IES, has entered into a definitive merger
agreement to acquire all of the outstanding common stock of MISCOR for an
aggregate transaction value of approximately $24 million. For MISCOR
shareholders, the per share consideration will be based upon MISCOR’s average
daily debt balance over the 30-day period ending fifteen business days prior
to the closing of the transaction. As of March 11, 2013, MISCOR’s unaudited
average daily debt balance over the prior 30-day period was approximately $7.2
million. MISCOR anticipates that its debt balance at closing of the
transaction will be between $6.5 and $5.5 million, which would yield
consideration of between $1.48 and $1.57 per share, a 26 to 34 percent premium
to MISCOR’s 60-day trading average. The price-per-share adjustment will be
communicated to shareholders prior to the closing of the election period and
is more fully described in the definitive merger agreement.

With annual revenues of approximately $50 million, MISCOR provides maintenance
and repair services to industrial customers, including electric utility, wind
power, transportation, energy, pulp and paper, steel and mining. It is engaged
in both on-site and off-site electrical and mechanical repair and
remanufacture of industrial equipment including electric motors, transformers,
switchgear, magnets, overhead cranes and generators. MISCOR also manufactures
and provides repair services for key components in large transportation
related motors and engines. MISCOR has locations in Indiana, Alabama, Ohio,
West Virginia, Maryland and California.

“We believe MISCOR’s electromechanical service offerings are an excellent
strategic complement to our existing Industrial business,” commented James M.
Lindstrom, Chairman and Chief Executive Officer of IES. He continued, “The
transaction meets our prudent strategy and financial criteria for investments,
increases our base of recurring revenues and is expected to accelerate the
utilization of IES’ net operating loss tax carryforwards, creating value for
all IES shareholders. Finally, the diversification of revenue and cash flow
streams across multiple customer segments and geographies enhances our
capability for further growth.”

Michael Moore, Chief Executive Officer of MISCOR said, “Partnering with IES
will position us for continued growth and enable us to maximize the favorable
opportunities we see ahead. We believe this transaction is in the best
interest of and creates significant value for our shareholders, our employees
and our customers. Although MISCOR will operate as a stand-alone subsidiary of
IES, we expect to operate from a position of even greater strength by taking
advantage of IES’ financial resources, nationwide presence, operational
infrastructure and, most importantly, IES’ long-term commitment and investment
philosophy.”

Additional Information About the Merger

The definitive agreement provides that each share of MISCOR common stock will,
at the election of the shareholder, be converted into the right to receive,
subject to the adjustment described above, either (i) a cash payment currently
estimated to be between $1.48 and $1.57 per share, subject to adjustment based
upon MISCOR’s average daily debt balance over the 30-day period ending with
the fifteenth complete trading date prior to the closing date, with a minimum
share price of $1.415 or (ii) shares of IES common stock having an equivalent
value, based upon the volume-weighted average of the sale prices per share of
IES common stock for 60 consecutive trading days (the “VWAP”) ending with the
fifteenth complete trading date prior to the closing date, subject to a collar
20% above and 20% below the 60-day VWAP ending with the second complete
trading day prior to the date of the merger agreement. For illustrative
purposes, assuming an average daily debt balance for MISCOR of $6.0 million,
the midpoint of the anticipated total debt range of MISCOR, and an IES VWAP of
$5.03, which is based on IES’ VWAP as of March 11, 2013, MISCOR shareholders
electing to receive IES common stock will receive 0.303 shares of IES common
stock for each share of MISCOR common stock they hold. IES expects to use cash
on hand and proceeds from debt financing to fund the acquisition. The
transaction is expected to be accretive to IES’ earnings per share in 2013,
net of acquisition costs.

Both IES and MISCOR expect to hold special meetings of their shareholders to
consider and act upon the proposed transaction as promptly as practicable.
Details regarding the record date for, and the date, time and place of, the
special meetings will be included in a press release when finalized. In
anticipation of the shareholders meeting, MISCOR and IES will mail to their
shareholders a notice of the meeting and a proxy statement relating to the
transaction and the vote to be taken at the meeting. The transaction is
subject to the approval of the shareholders of both IES and MISCOR and the
requirement that a majority of each company’s non-affiliated shareholders do
not vote against the transaction, as well as other customary approvals.

The disinterested members of the board of directors of IES unanimously
approved the merger agreement. MISCOR established a special committee of
independent directors that approved the merger agreement and recommended
approval of the merger agreement by the full board of directors. After
receiving approval from the special committee, the disinterested members of
the board of directors of MISCOR unanimously approved the merger agreement.

Stifel rendered a fairness opinion to the Board of Directors of IES, and
Periculum Capital Company, LLC acted as a financial advisor to IES. Western
Reserve Partners LLC acted as financial advisor to MISCOR on the transaction
and rendered a fairness opinion to the Board of Directors of MISCOR.

About Integrated Electrical Services, Inc.

Integrated Electrical Services, Inc. is a leading national provider of
electrical infrastructure services to the communications, commercial,
industrial and residential markets. Our 2,500 employees serve clients
throughout the United States. For more information about IES, please visit
www.ies-corporate.com.

About MISCOR Group Ltd.

MISCOR, through its subsidiaries, provides electrical and mechanical solutions
to customers both in the United States and abroad. The company operates in two
segments, Industrial Services and Rail Services. For more information about
MISCOR, please visit www.miscor.com.

Forward-Looking Statements

Information set forth in this press release contains “forward-looking
statements” (as defined in Section 27A of the Securities Act of 1933, as
amended, and Section21E of the Securities Exchange Act of 1934, as amended),
which reflect IES’ and MISCOR’s expectations regarding future events. The
forward-looking statements involve substantial risks and uncertainties that
could significantly affect expected results, and actual future results and
stockholder values of IES, MISCOR and the combined company could differ
materially from those described in these statements. Such forward-looking
statements include, but are not limited to, statements about the expected
value of the merger consideration, the benefits of the business combination
transaction involving IES and MISCOR, including future financial and operating
results, accretion to IES’ earnings per share arising from the transaction,
the expected amount and timing of cost savings and operating synergies,
whether and when the transactions contemplated by the merger agreement will be
consummated, the new combined company’s business strategy, plans, market and
other expectations, objectives, intentions and other statements that are not
historical facts.

The following additional factors, among others, could cause actual results to
differ from those set forth in the forward-looking statements: the inability
to consummate the merger; the inability to achieve, or difficulties and delays
in achieving, synergies and cost savings relating to the merger; difficulties
and delays in obtaining consents and approvals, including shareholder
approvals, that are conditions to the completion of the merger; the ability of
IES and MISCOR to enter into, and the terms of, future contracts; the impact
of governmental laws and regulations; the adequacy of sources of liquidity;
the ability of IES to retain certain employees key to the ongoing success of
the combined company and the availability of other skilled personnel; the
effect of litigation, claims and contingencies; the inability to carry out
plans and strategies as expected; future capital expenditures and
refurbishment, repair and upgrade costs; delays in refurbishment and upgrade
projects; the sufficiency of funds for required capital expenditures, working
capital and debt service; liabilities under laws and regulations protecting
the environment; the impact of a material adverse effect on either company;
and the impact of purchase accounting. Additional factors that may affect
future results are contained in IES’ and MISCOR’s filings with the Securities
and Exchange Commission (the “SEC”), which are available at the SEC’s web site
http://www.sec.gov. IES and MISCOR disclaim any duty to update and revise
statements contained in these materials based on new information or otherwise.

Forward-looking statements are provided in this press release pursuant to the
safe harbor established under the private Securities Litigation Reform Act of
1995 and should be evaluated in the context of the estimates, assumptions,
uncertainties, and risks described herein.

Important Information for Investors and Security Holders

This communication does not constitute an offer to sell or the solicitation of
an offer to buy any securities or a solicitation of any vote or approval. IES
and MISCOR will file with the SEC a Registration Statement on Form S-4 that
will include a joint proxy statement of IES and MISCOR that also will
constitute a prospectus of IES regarding the proposed transaction. INVESTORS
AND SECURITY HOLDERS OF IES AND MISCOR ARE URGED TO CAREFULLY READ THE JOINT
PROXY STATEMENT/PROSPECTUS AND OTHER DOCUMENTS THAT MAY BE FILED WITH THE SEC
WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION
REGARDING IES, MISCOR AND THE PROPOSED TRANSACTION. A definitive joint proxy
statement/prospectus will be sent to the holders of common stock of IES and
MISCOR seeking their approval of the proposed transaction. Investors and
security holders may obtain a free copy of the proxy statement/prospectus
(when available) and other documents filed by IES and MISCOR with the SEC at
the SEC’s web site at www.sec.gov. You may also read and copy any reports,
statements or other information filed with the SEC at the SEC public reference
room at 100 F Street N.E., Room 1580, Washington, D.C. 20549. Please call the
SEC at (800) 732-0330 or visit the SEC’s website for additional information on
its public reference room

The joint proxy statement/prospectus and such other documents (relating to
IES) may also be obtained from IES for free (when available) from IES’ web
site at www.ies-corporate.com or by directing a request to: Integrated
Electrical Services, Inc., 5433 Westheimer Road, Suite 500, Houston, Texas
77056, Attention: Investor Relations, or by phone at (713) 860-1500. The joint
proxy statement/prospectus and such other documents (relating to MISCOR) may
also be obtained from MISCOR for free (when available) from MISCOR’s web site
at www.miscor.com or by directing a request to: MISCOR Group, Ltd., 800 Nave
Rd., SE, Massillon, Ohio 44646, Attention: Investor Relations, or by phone at
(330) 830-3500.

Participants in the Solicitation

IES, its directors, executive officers and certain members of management and
employees may be considered “participants in the solicitation” of proxies from
IES’ stockholders in connection with the proposed transaction. Information
regarding such persons and a description of their interests in the proposed
transaction will be contained in the joint proxy statement/prospectus when it
is filed with the SEC.

MISCOR, its directors, executive officers and certain members of management
and employees may be considered “participants in the solicitation” of proxies
from MISCOR’s stockholders in connection with the proposed transaction.
Information regarding such persons and a description of their interests in the
proposed transaction will be contained in the joint proxy statement/prospectus
when it is filed with the SEC.

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Contact:

Integrated Electrical Services, Inc.
James Lindstrom, 203-992-1111
CEO
or
ICR Inc.
Phil Denning, 203-682-8246
phil.denning@icrinc.com
or
MISCOR Group, Ltd.
Michael Moore, 330-830-3501
CEO
 
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