Quanta Services to Acquire InfraSource Services in All-Stock Transaction
March 19 2007 - 4:00AM
Business Wire
Quanta Services, Inc. (NYSE: PWR) and InfraSource Services, Inc.
(NYSE: IFS) today announced that they have signed a definitive
merger agreement under which Quanta will acquire InfraSource in an
all-stock transaction valued at $1.26 billion based on Quanta�s
closing stock price on March 16, 2007. The combination of Quanta
and InfraSource will create a leading specialized contracting
services company serving the electric power, natural gas,
telecommunications and cable television industries. Empowered by a
broad national footprint, flexible workforce, extensive equipment
resources and innovative technologies, the combined company will
partner with customers to meet the immediate and growing need for
strategic infrastructure solutions. Under the terms of the merger
agreement, approved by both Boards of Directors, InfraSource
stockholders will receive 1.223 shares of Quanta common stock for
each outstanding common share of InfraSource they own at closing.
This represents a per share value of $30.13, or a 17.4% premium
over the closing price of InfraSource common stock on March 16,
2007. Upon closing, on a fully diluted basis, Quanta and
InfraSource stockholders are expected to own approximately 75% and
25%, respectively, of the combined company. Based on 2006 results,
the combined company would have revenues of over $3.1 billion and
adjusted EBITDA of over $270 million. The transaction is expected
to be accretive to Quanta�s earnings per share in 2008. �The
addition of InfraSource�s complementary businesses, strategic
geographic footprint and talented employees will enhance Quanta�s
resources and expand our service portfolio. As a combined company,
we will be well-positioned to serve all of our customers during a
period of rapid growth and increased transmission and distribution
spending,� said John R. Colson, chairman and chief executive
officer of Quanta. �We intend to leverage our combined workforce of
more than 16,000 employees to provide expanded services to our
customers in both planned and emergency situations.� Colson added,
�We expect the combination to result in meaningful cost and
operational synergy opportunities, including the integration of
project and asset management functions, improved resource
utilization, procurement and administrative cost savings, and
enhanced cross-selling and marketing opportunities.� David R.
Helwig, chairman and chief executive officer of InfraSource,
commented, �This transaction represents a tremendous opportunity
for our customers, stockholders and employees to share in the
significant upside potential of a stronger combined business.
Together, InfraSource and Quanta will create an industry-leading
company with the scale and scope necessary to meet the growing
infrastructure needs of energy and communications providers across
North America.� The combined company will have the ability to
provide customers expanded infrastructure service offerings from
design and engineering, to installation and maintenance, to
energized services and emergency restoration. Along with enhancing
and complementing Quanta�s electric power transmission and
distribution capabilities, InfraSource brings strength in
substation engineering and installation, gas distribution
capabilities and dark fiber leasing to the combined company. In
addition, Quanta�s nationwide footprint will be strengthened,
providing the company a broader platform from which to grow its
services. The combined company�s additional resources and superior
service portfolio also position it to take advantage of positive
industry dynamics, which include electric utility companies�
increased spending and outsourcing trends. In the power industry,
the need to upgrade the nation�s aging and congested transmission
and distribution grid and the Energy Policy Act of 2005 are
expected to continue to drive increased investment in
infrastructure. Additionally, utilities continue to move toward
outsourcing as a way to reduce costs while gaining superior service
and improved flexibility. In the telecommunications industry, the
convergence of voice, video and data is creating increased demand
for fiber infrastructure to support the delivery of key
next-generation services. The transaction is expected to close in
the third quarter of 2007 subject to stockholder and customary
regulatory approvals. Quanta and InfraSource intend to file a joint
proxy statement/prospectus with the Securities and Exchange
Commission. Credit Suisse Securities (USA) LLC is acting as
financial advisor to Quanta, and Akin Gump Strauss Hauer and Feld,
LLP is serving as its legal advisor. Citigroup Corporate and
Investment Banking is acting as financial advisor to InfraSource
and Ballard Spahr Andrews & Ingersoll, LLP is serving as its
legal advisor. The calculation of adjusted EBITDA, as used in this
press release, can be viewed at the �Acquisition Announcement�
section of Quanta�s website at www.quantaservices.com and
�Investors� section of the InfraSource website at
www.infrasourceinc.com. Conference Call and Webcast Information
Quanta and InfraSource have scheduled a conference call for today,
March 19, at 9:00 a.m. Eastern Daylight Savings Time. To
participate in the call, dial 866-425-6195 at least 10 minutes
before the conference call begins and ask for the Quanta Services
conference call. Investors, analysts and the general public also
will have the opportunity to listen to the conference call over the
Internet by visiting the companies� websites at
www.quantaservices.com in the �Investor Center� section and
www.infrasourceinc.com in the �Investors� section and a replay will
be available on these websites for 30 days following the conference
call. To listen to the call live on the web, please visit the
Quanta Services or InfraSource Services website at least fifteen
minutes early to register, download and install any necessary audio
software. The materials presented during the webcast will be posted
on the websites as referenced above. About Quanta Services, Inc.
Quanta Services, Inc. (NYSE: PWR) is a leading provider of
specialized contracting services, delivering end-to-end network
solutions for the electric power, gas, telecommunications and cable
television industries. The company�s comprehensive services include
designing, installing, repairing and maintaining network
infrastructure nationwide. About InfraSource Services, Inc.
InfraSource Services, Inc. (NYSE: IFS) is a specialty contractor
servicing utility transmission and distribution infrastructure in
the United States. InfraSource designs, builds and maintains
transmission and distribution networks for utilities, power
producers and industrial customers. Additional Information and
Where to Find It In connection with the proposed acquisition,
Quanta and InfraSource will file with the Securities and Exchange
Commission a joint proxy statement/prospectus and other documents
regarding the proposed transaction. A joint proxy
statement/prospectus will be sent to stockholders of Quanta and
InfraSource, seeking their approval of the transaction.
STOCKHOLDERS OF QUANTA AND INFRASOURCE ARE URGED TO READ CAREFULLY
THE JOINT PROXY STATEMENT/PROSPECTUS WHEN IT BECOMES AVAILABLE
BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION ABOUT QUANTA,
INFRASOURCE, AND QUANTA�S ACQUISITION OF INFRASOURCE. Such proxy
statement/prospectus, when available, and other relevant documents
may be obtained, free of charge, on the Securities and Exchange
Commission�s website (http://www.sec.gov). The joint proxy
statement/prospectus and such other documents (relating to Quanta)
may also be obtained for free from Quanta�s website at
www.quantaservices.com or from Quanta by directing a request to
Quanta Services, Inc., 1360 Post Oak Blvd., Suite 2100, Houston, TX
77056, Attention: Corporate Secretary, or by phone at 713-629-7600.
The joint proxy statement/prospectus and such other documents
(relating to InfraSource) may also be obtained for free from
InfraSource�s website at www.infrasourceinc.com or from InfraSource
by directing a request to InfraSource Services, Inc., 100 W. Sixth
Street, Media, PA 19063, Attention: General Counsel, or by phone at
610-480-8000. Participants in the Solicitation Quanta, its
directors, executive officers and certain members of management and
employees may be considered �participants in the solicitation� of
proxies from Quanta�s stockholders in connection with the
acquisition. Information about Quanta and its directors and
executive officers and their ownership of Quanta securities will be
contained in the joint proxy statement/prospectus when it is filed
with the SEC. InfraSource, its directors, executive officers and
certain members of management and employees may be considered
�participants in the solicitation� of proxies from InfraSource�s
stockholders in connection with the acquisition. Information about
InfraSource and its directors and executive officers and their
ownership of InfraSource securities will be contained in the joint
proxy statement/prospectus when it is filed with the SEC.
Forward-Looking Statements Statements about Quanta�s and
InfraSource�s outlook and all other statements in this release (and
statements made regarding the subjects of this release, including
on the conference call announced herein) other than historical
facts are forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. These
forward-looking statements rely on a number of assumptions
concerning future events and are subject to a number of
uncertainties and factors, many of which are outside Quanta�s and
InfraSource�s control, which could cause actual results to differ
materially from such statements. Forward-looking information
includes, but is not limited to, statements regarding the new
combined company, including Quanta�s and InfraSource�s expected
combined financial and operating results, accretion to Quanta�s
earnings per share arising from the transaction, the expected
amount and timing of cost savings and operating synergies, and
whether and when the transactions contemplated by the merger
agreement will be consummated. There are a number of risks and
uncertainties that could cause results to differ materially from
those indicated by such forward-looking statements, including the
failure to effectively integrate the combined operations and
realize anticipated savings and synergies; the inability to obtain
approvals from, and the results of the review of the proposed
transaction by, various regulatory agencies; unexpected costs or
unexpected liabilities that may arise from the transaction, whether
or not consummated; the effects of purchase accounting, including
the determination of amortizable intangibles, on the combined
companies future operating results; the potential adverse impact to
the businesses of the companies as a result of uncertainty
surrounding the transaction, including the inability to retain key
personnel; the potential adverse effect of any conditions imposed
on Quanta or InfraSource in connection with consummation of the
merger; the failure to receive the approval of the merger by the
stockholders of InfraSource or the failure to receive the approval
of the issuance of Quanta common stock in connection with the
merger by the stockholders of Quanta; the failure to satisfy
various other conditions to the closing of the merger contemplated
by the merger agreement; future regulatory or legislative actions
that could adversely affect the companies or the failure of the
Energy Policy Act of 2005 to result in increased spending by
customers; and the potential adverse effect of other economic,
business, and/or competitive factors on the combined companies.
These forward-looking statements are also affected by the risk
factors, forward-looking statements and challenges and
uncertainties described in Quanta�s and InfraSource�s respective
Form 10-K reports for the fiscal year ended December 31, 2006 and
any other filings with the Securities and Exchange Commission,
which are available free of charge on the SEC�s website at
http://www.sec.gov and through Quanta�s and InfraSource�s websites
at www.quantaservices.com and www.infrasourceinc.com. Quanta and
InfraSource expressly disclaim any intention or obligation to
revise or update any forward-looking statements whether as a result
of new information, future events, or otherwise.
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