MasTec Inc., Coral Gables, FL, plans to acquire Henkels & McCoy Group Inc., one of the largest U.S. private electrical power transmission and distribution utility services firm and the sixth largest electrical contractor on EC&M magazine's Top 50 listing. The 98-year-old Henkels & McCoy has approximately $1.5 billion in fiscal 2021 revenue.
Rod Henkels, chairman and CEO of Henkels, said in the press release, "As a third generation, family-owned company, we carefully evaluated multiple alternatives for our operations. Our choice of MasTec was based on the strong cultural fit for both our loyal employees and long-term customers. In addition, we believe that MasTec provides significant strategic growth opportunities and, as evidence of our strong belief in the merits of this combination, my brother Paul and I have requested, and will receive, a significant portion of the proceeds of the transaction in MasTec common stock."
Total transaction consideration will be $600 million, with approximately $420 million in cash (including the repayment of Henkels' debt) plus approximately 2 million shares of MasTec common stock, subject to customary purchase price adjustments. Cash will be provided by MasTec's cash on hand as well as borrowing under its existing unsecured credit facility. MasTec anticipates that post-acquisition leverage metrics will remain comfortably within its target range with ample liquidity.
The transaction supports MasTec's long-term strategy to expand in the fast-growing electric utility services market with incremental recurring master service agreement revenue.