Quanta Services To Acquire InfraSource Services In All-Stock Transaction
March 19 2007 - 7:30AM
PR Newswire (US)
* Complementary Capabilities and Expanded Geographic Presence
Enable Enhanced Service Offerings in Rapidly Growing Markets *
Combined 2006 Revenues of Over $3.1 Billion and Adjusted EBITDA of
Over $270 Million * Exchange Ratio of 1.223 Shares of Quanta Stock
for Each InfraSource Share * Transaction Expected to be EPS
Accretive to Quanta in 2008 HOUSTON, and MEDIA, Pa., March 19
/PRNewswire-FirstCall/ -- 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 http://www.quantaservices.com/ and
"Investors" section of the InfraSource website at
http://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
http://www.quantaservices.com/ in the "Investor Center" section and
http://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
http://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 http://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 http://www.quantaservices.com/ and
http://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. Quanta Contacts: Press Contacts:
InfraSource Contacts: James Haddox, CFO Jim Barron John Curran Reba
Reid Brooke Morganstein 610-480-8000 713-629-7600 Sard Verbinnen
& Co. Mahmoud Siddig 212-687-8080 212-889-4350 DATASOURCE:
InfraSource Services, Inc. CONTACT: James Haddox, CFO, or Reba
Reid, both of Quanta Services, Inc., +1-713-629-7600; or Jim Barron
or Brooke Morganstein, Press Contacts, both of Sard Verbinnen &
Co., +1-212-687-8080; or John Curran, +1-610-480-8000, or Mahmoud
Siddig, +1-212-889-4350, both for InfraSource Services, Inc. Web
site: http://www.infrasourceinc.com/ http://www.quantaservices.com/
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