US-based Quanta Services has announced strategic acquisitions in the American market
Quanta Services, a specialised contracting services company, has acquired gas utility contractor The Hallen Construction (Hallen) and two speciality utility foundation and pole-setting contractors for approximately $330m (£267.08m).
The deal comprised nearly $328m (£265.46m) paid in cash, subject to working capital adjustments, and approximately $2m (£1.62m) in stock.
Founded in 1927, Hallen serves key strategic markets in the northeast US.
The US-based construction company has strong relationships with major utilities in the American market, primarily providing gas distribution and transmission services, as well as underground electric distribution and transmission services.
Headquartered in Plainview, New York, Hallen also provides a utility services platform in the northeast, which Quanta can use to expand its electric infrastructure services offering.
Quanta Services president and CEO Duke Austin said: “We are pleased to announce these acquisitions, as each company provides Quanta with an exceptional management team that enhances our ability to collaborate with our customers on their multi-year programmatic spending plans, and are additive to our more than $7.5 billion of estimated 2019 utility revenues. As a result, we believe these acquisitions provide a repeatable and sustainable earnings profile that is complementary to our business and consistent with our strategy.
“Hallen represents a sizeable expansion into key northeast markets characterized by aged infrastructure and mandatory multi-decade modernization programs that are in their early stages, which we believe improves our long-term visibility and provides attractive multi-year growth opportunities and accretive returns for our stockholders. We welcome the employees of these companies to the Quanta family.”
Quanta Services acquisitions are expected to be accretive to margins, cash flow and returns
The acquisitions are expected to accelerate the progress of Quanta Services towards achieving medium-term target margins for the pipeline and industrial segment and be accretive to adjusted EPS of at least $0.20 in 2020 without synergies.
Furthermore, the acquisitions are expected to be accretive to Quanta’s future cash flow generation and return on invested capital.
Based in Houston, Texas, Quanta Services has operations throughout the US and in select international markets such as Canada, Latin America and Australia.