Quanta Services Inc., Houston, one of the largest electrical contractors in the United States, plans to buy InfraSource Services Inc. in an all-stock deal worth $1.26 billion.
Quanta Services provides specialized contracting services for the electric power, telecommunications, broadband cable and gas pipeline industries. InfraSource Services Inc., Media, Pa., 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.
The combination of Quanta and InfraSource would create a specialized contracting services company serving the electric power, natural gas, telecommunications and cable television industries, according to Quanta. The combined company would provide customers expanded infrastructure service offerings such as design and engineering, installation and maintenance to energized services and emergency restoration. Quanta’s nationwide footprint would be strengthened, providing the company a broader platform from which to grow its services.
Company executives believe the acquisition will give Quanta and InfraSource a unique ability to adapt to several key trends now reshaping the utility and telecommunications markets. 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, and provide new business for contractors that specialize in this work.
There is also a surge in outsourcing at power companies as they search for ways to reduce costs, and they may be looking to contractors to provide some of these services. Also, the convergence of voice, video and data in the telecommunications industry is creating increased demand for fiber infrastructure to support the delivery of key next-generation services.
“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 Colson, Quanta’s chairman and CEO. “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.”