MasTec has obtained the committed bridge financing from Bank of America and JP Morgan and aims to pursue certain other debt financing alternatives to fund the cash portion of the transaction consideration
MasTec has agreed to acquire renewable-focused infrastructure developer Infrastructure and Energy Alternatives (IEA) in a cash-and-stock transaction valued at about $1.1bn.
Established in 2011, IEA offers renewable energy and infrastructure solutions, with expertise in engineering, procurement, construction and other related services.
The company has completed more than 260 utility-scale wind and solar projects across North America and executed complex public and private infrastructure construction projects.
Under the terms of the agreement, the US-based engineering and construction company will purchase all the outstanding shares of IEA, at a price of $14 per share.
IEA shareholders are expected to receive $10.50 per share in cash, and 0.0483 of a MasTec share, valued at $3.50 per share, based on MasTec’s closing share price on 22 July 2022.
The deal value represents a 34% premium to IEA’s closing stock price on 22 July 2022.
The transaction has been approved by the boards of directors of both companies.
It is expected to close in the fourth quarter of 2022, subject to customary closing conditions, including IEA stockholders and Hart-Scott-Rodino approvals.
MasTec said it has signed agreements with various IEA shareholders, who collectively own around 35% of IEA’s outstanding stock, to vote in favour of the transaction.
MasTec chief executive officer Jose Mas said: “We are proud to expand our service capabilities, scale and expertise providing critical infrastructure to support the nation’s energy transition to secure and sustainable renewable sources.
“We are excited to welcome JP, the IEA management team and almost 6,000 IEA team members to the MasTec family. We have long admired IEA’s operating excellence, and we have a strong cultural alignment with IEA in safety and customer service.”
MasTec has obtained committed bridge financing from Bank of America and JP Morgan and intends to pursue certain other debt financing alternatives to fund the cash portion of the transaction consideration.
IEA president and chief executive officer JP Roehm said: “The combination with MasTec will create new opportunities for IEA’s employees and our customer base.
“Our joint resources and capabilities will advance our ability to serve our customers in the renewable energy, power delivery and infrastructure markets.
“MasTec is the ideal owner for IEA and I am excited to continue to lead the IEA team during this exciting new chapter of our story.”
JP Morgan Securities served as a financial advisor, Fried Frank Harris Shriver & Jacobson and Holland & Knight as legal counsel to MasTec, while Lazard served as a financial advisor and Gibson, Dunn & Crutcher as legal counsel to IEA on the transaction.