Dycom Industries, Inc.
) announced the signing of an agreement with
Quanta Services, Inc
) to acquire all the domestic telecommunications infrastructure
services units of Quanta for approximately $275 million. The deal
is expected to be closed by December 31, 2012, subject to
Headquartered in Palm Beach Gardens, Florida, Dycom Industries
is a leading provider of specialty contracting services. Its
offerings include engineering, construction, maintenance and
installation services to telecommunications providers,
underground facility locating services to various utilities and
other construction and maintenance services to electric and gas
utilities and others.
The acquisition is a strategic fit and perfectly complements
Dycom's existing business, as the to-be-acquired units offer
contracting services like engineering, construction, maintenance
and installation to telecom companies and other construction and
maintenance services to electric and gas utilities. These units
are expected to generate revenues of $400 million to $450 million
in calendar year 2013.
This acquisition is expected to strengthen Dycom's customer
base, geographic presence, and technical service offerings.
Further, the acquisition significantly enhances Dycom's rural
telecommunications engineering and construction capacities,
provides additional construction resources for wireless carriers
and boosts the company's already-robust broadband construction
Given the recent industry trend of growing investments from
the customers and a very attractive financing environment, Dycom
believes that this is the opportune moment to increase its scale
Quanta's telecom subsidiaries currently operate in 49 states,
serving over 300 individual customers. Its principal business
facilities are primarily located in Arizona, California, Florida,
Georgia, Minnesota, New York, Pennsylvania and Washington.
Revenue generated over the past 12 months was about $535
Excluding one-time transaction and integration costs of
approximately $12 million to $15 million, the acquisition is
expected to be accretive to Dycom's earnings by 5 cents to 10
cents per share annually, after non-cash amortization
Quanta Services Inc. is a leading national provider of
specialty contracting services, and is one of the largest
contractors serving the transmission and distribution sector of
the North American electric utility industry. The company
primarily competes with
) and currently holds a Zacks #2 Rank, implying a short-term (1-3
months) Buy rating on the stock.
DYCOM INDS (DY): Free Stock Analysis Report
FLUOR CORP-NEW (FLR): Free Stock Analysis
QUANTA SERVICES (PWR): Free Stock Analysis
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