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., designs, builds and maintains transmission and distribution networks for utilities, power producers and industrial customers.
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 deal is expected to close in the third quarter.