US-based infrastructure construction company MasTec has signed an agreement to acquire utility services provider Henkels & McCoy Group for $600m.

Founded in 1923, Henkels is one of the largest private electrical power transmission and distribution utility services firm in the US.

The acquisition includes significant crew and equipment resource capacity in growing utility services markets.

The purchase price includes nearly $420m in cash and approximately two million shares of MasTec common stock.

MasTec intends to fund the cash portion of the consideration with cash on hand as well as borrowing under its existing unsecured credit facility.

The deal is part of MasTec’s long-term strategy to expand in the fast-growing electric utility services market.

MasTec CEO Jose Mas said: “First of all, we look forward to welcoming almost 5,100 Henkels team members to the MasTec family.  Henkels’ operating excellence is well known in the industry, and together with MasTec, our expanded resources and footprint will help serve expected significant growth demand in the utility sector.

“Culture in a services operation is critical, and both Henkels and MasTec have proud traditions as family businesses, with a strong focus on safety and customer service.

“We believe that Henkels’ expertise, scale and capacity, when combined with our existing operations, will provide a compelling suite of service offerings to support our customers’ needs as they work to transition to renewable energy generation, modernize power grid systems and reduce carbon emissions.”

Henkels has long-tenured, blue chip customer base with nearly 70% recurring MSA revenue. The company earned a revenue of $1.5bn in fiscal 2021.

The acquisition is expected to provide complementary service footprint for MasTec to expand its geographical and customer reach.

Subject to the receipt of required Hart-Scott-Rodino approvals and the satisfaction of other customary closing conditions, the transaction is expected to be closed by the end of this year.

Houlihan Lokey acted as exclusive financial advisor to Henkels in the deal, while Sidley Austin was its legal counsel.

In May this year, MasTec announced the acquisition of INTREN to expand its electrical distribution operations footprint.

Headquartered in Union, Illinois, INTREN is a major utility specialty contractor, mainly offering electrical distribution network services to utilities, municipalities, and cooperatives in the US.