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                                                                    Exhibit 99.1

[ENCOMPASS LOGO]
                                                  Encompass Services Corporation
                                                  3 Greenway Plaza, Suite 2000
                                                  Houston, Texas 77046
                                                  Phone: 713-860-0100
                                                  Fax: 713-960-8036
                                                  encompass.com

News Release

   Encompass to Offer Equity up to $72.5 Million

     o    Apollo Commits to $35 Million of Equity to be offered

     o    Amends Credit Agreement with Senior Lenders through 2005

HOUSTON, June 28, 2002 - Encompass Services Corporation ("Encompass" or the
"Company") (NYSE: ESR) announced that its Board of Directors has approved a plan
to issue up to $72.5 million in equity, and that Apollo Investment Fund IV, L.P.
("Apollo") has agreed to purchase $35 million of the Equity Offering described
below (the "Apollo Investment"). The Apollo Investment is subject to majority
approval of Encompass shareholders. Apollo currently holds approximately $300
million in Mandatorily Redeemable Convertible Preferred Stock of the Company,
the terms of which remain unchanged by the proposed transactions.

     $72.5 million Equity Offering

     o    Encompass plans a $50 million rights offering

     o    Depending on subscription levels, Encompass may issue up to $72.5 of
          Common Stock and Convertible Preferred Stock (the "Equity Offering")

     o    Apollo will invest $35 million in the Equity Offering and will vote
          shares in favor of the offering

     o    Price will be a range of $.55 to $.70 per share, based on ten-day
          average closing price

     o    Subject to shareholder and regulatory approvals

     Credit Agreement successfully amended

     o    Provides a $300 million revolver and ample liquidity of more than $150
          million

     o    Provides significant long-term covenant relief through the maturity of
          the credit facility, enhancing operational flexibility in a soft
          economy

     o    Represents a strong vote of confidence in the Company from both its
          senior lenders and its largest equity holder

"I believe these transactions will greatly benefit all of our shareholders, and
the rights offering will provide all shareholders the opportunity to
participate," said Joe Ivey, President and Chief Executive Officer, "I am
pleased with the support and commitment that Apollo has demonstrated, and the
enhanced financial flexibility achieved with the amended credit agreement. I
look forward to personally sharing these positive developments with our valued
customers, vendors and employees, who are key to our commercial success. These
transactions clearly provide Encompass with the commercial flexibility to
execute our long-term business plan and respond to developing market
opportunities."

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Proposed Rights Offering

Approval of the Equity Offering and the Apollo Investment was recommended to the
Board by a Special Committee of the Board of Directors, comprised solely of
independent directors and advised by Lehman Brothers Inc. The Company intends to
promptly file formal documents detailing the proposed transactions and the
proposed rights offering with the SEC for customary review. Following compliance
with SEC requirements, the Company will then formally present the Apollo
Investment to shareholders for their approval.

The proposed $72.5 million Equity Offering will allow all shareholders,
including Apollo, to effectively purchase shares of common stock of the Company
at a price equal to the average closing price for the 10 trading days following
the date of this announcement, but not less than $.55 per share nor more than
$.70 per share (the "Collar Price Range"). In the proposed rights offering,
Encompass shareholders will receive non-transferable rights to purchase
additional shares of common stock of the Company, on a pro-rata basis, for each
common share, or common equivalent share, held as of a record date to be
established. All rights-holders who fully exercise their subscription rights
will also have an over-subscription right to acquire any shares not purchased by
other rights-holders, subject to a pro-rata allocation in the event the rights
offering is oversubscribed. The rights offering is expected to commence promptly
after registration of the shares subject to the offering.

Under certain circumstances, it is possible that the Company may not have an
adequate number of authorized common shares to complete the Equity Offering. In
that event, the Company will issue some of the Apollo Investment in a Series C
Convertible Preferred Stock in order for the Company to receive the full Apollo
Investment. Such newly issued preferred shares will have the same relative
rights as the Common Stock of the Company including voting rights, receive no
preferred dividend, and will immediately convert into common shares once the
Company has available an adequate number of authorized and unissued shares of
Common Stock.

In connection with the Equity Offering, Apollo has agreed to purchase $35
million of equity in the Company. Assuming the rights offering is fully
subscribed, the Apollo Investment is funded and any Series C Convertible
Preferred Stock issued is converted into common, as described above, then
considering the Collar Price Range, Apollo will acquire from 50 to 64 million
common shares (or common share equivalents) representing from 30 to 32 percent
of the common shares then outstanding. Accordingly, on a fully diluted basis,
Apollo's effective ownership in Encompass will increase to a range of 38 to 39
percent after considering the effect of the common equivalent shares related to
the existing convertible preferred stock Apollo currently owns. In the event
Apollo is the only participant in the rights offering and no other shareholder
chooses to participate, then Apollo will effectively control 53 to 57 percent of
the common stock of the Company, after giving effect to the $35 million Apollo
Investment in the Equity Offering and its existing convertible preferred stock
investment.

Significant conditions related to the rights offering and the Apollo Investment
include shareholder approval, the effectiveness of a registration statement,
compliance with anti-trust laws and other customary conditions.

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Proceeds from the rights offering will be used to reduce senior indebtedness, as
described below, and for general corporate purposes. This release does not
constitute an offer to sell any of the Company's securities.

Credit Agreement Successfully Amended

Encompass has successfully reached agreement with its lenders and amended its
credit agreement in order to achieve long-term covenant modifications through
its maturity date. The Company's newly amended credit agreement provides for a
revolving credit facility of $300 million, of which approximately $153 million
was available for additional borrowing as of June 27, 2002. Until the Apollo
Investment is actually funded, the revolving credit portion of the credit
facility will be temporarily limited to a maximum of $250 million. The revolving
portion of the credit facility matures in February of 2005. The total committed
amount under the amended credit agreement provides for maximum senior borrowings
of approximately $700 million, including approximately $400 million in term
loans, which mature in 2006 and 2007. The amendment requires the Company to
permanently reduce the term loans by $31 million immediately upon receipt of the
Apollo Investment. The Company is also required to apply 50 percent of any
proceeds from the Equity Offering in excess of $35 million, less certain
permitted expenses, toward permanent reduction of the revolver and the term
loans on a pro-rata basis.

The Company has agreed, as part of the amendment, to complete the rights
offering, which includes the Apollo Investment, no later than October 15, 2002.
Management believes this date provides adequate time to complete regulatory
review and approval of the proposed transactions.

Updated 2002 Guidance

Encompass is updating financial guidance based on:

     o    Continued softness in non-residential construction spending as
          recently reported by the U.S. Department of Commerce, particularly in
          key sectors such as commercial office buildings, hotels and general
          industrial facilities

     o    Revised internal forecasts which reflect a continuation of a very
          competitive environment and lower margins than previously expected
          associated with future job awards

   The Company's current outlook for 2002 is as follows:

     o    Revenues are expected to range from $3.4 to $3.6 billion.

     o    EBITDA is expected to range from $130 to $160 million.

The Company indicated that its newly amended credit agreement provides adequate
financial covenant flexibility for EBITDA below the low end of the above
guidance.

About Encompass Services Corporation

Encompass Services Corporation is one of the nation's largest providers of
facilities systems and services. Encompass provides electrical technologies,
mechanical services and cleaning systems to commercial, industrial and
residential customers nationwide. Additional information and

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press releases about Encompass are available on the Company's web site at
www.encompass.com.

Forward-Looking Statements

Certain statements in this press release may contain forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995.
These statements are based on the Company's current expectations and involve
risks and uncertainties that could cause the Company's actual results to differ
materially from those set forth in the statements. The Company can give no
assurance that such expectations will prove to be correct. Factors that could
cause the Company's results to differ materially from current expectations
include: the level of demand for its services by multi-site customers; the level
of interest rates, which affects demand for the Company's services and its
interest expense; the potential impact of any acquisition, disposition, merger,
joint venture or any other significant financial transactions that could occur
in the future; working capital requirements; general economic conditions; as
well as other factors listed in the Company's Form 10-K for the year ended
December 31, 2001, and its most recent Form 10-Q.

Investors and shareholders are advised to read the proxy statement that will be
filed by the Company with the Securities and Exchange Commission in connection
with the proposed transaction because it will contain important information.
Investors and shareholders may obtain a free copy of the proxy statement (when
available) and other documents filed by the Company with the SEC at the SEC's
web site at www.sec.gov. The proxy statement and such other documents may also
be obtained for free from the Company by directing a request to:

         Encompass Services Corporation
         3 Greenway Plaza, Suite 2000
         Houston, Texas 77046
         Attn: Investor Relations
         Telephone: 713-860-0100

The Company, its directors, executive officers and certain members of management
and employees may be considered "participants in the solicitation" of proxies
from the Company's shareholders in connection with the proposed transaction.
Information regarding such persons and a description of their interests in the
transaction are contained in the Company's Proxy Statement and Annual Report on
Form 10-K filed with the SEC. Additional information regarding the interests of
those persons may be obtained by reading the proxy statement when it becomes
available.


Contacts:
Todd A. Matherne                            Bob Arnold
Vice President and Treasurer                Assistant Treasurer
713-860-0283                                713-860-0157

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