Quanta Capital Solutions, Inc, a wholly owned subsidiary of
Quanta Services Inc
) completed the divestment of its entire equity stake in Howard
Midstream Energy Partners, LLC to certain affiliated investment
funds managed by Alinda Capital Partners.
The deal was an all cash transaction worth $221 million,
resulting in a pre-tax gain of about $113 million or 32 cents per
share to Quanta in the fourth quarter of 2013. The net proceeds
(after tax) from the sale are expected to be approximately $175
million. Quanta plans to use the proceeds of this transaction to
support its ongoing strategic growth, which include acquisitions
Quanta Capital is a wholly owned subsidiary of Quanta
Services. It is the investment arm of Quanta Services. It
structures, makes and manages investments that enhance Quanta's
success in its core business Engineering, Procurement and
Construction (EPC) services, while assisting clients in the
achievement of their project investment objectives.
On Dec 6, Quanta Services announced a three-year $500 million
share repurchase program, thereby reinforcing the fact that the
company is committed to its long-term strategy of returning cash
to shareholders. This apart, on Oct 30, Quanta Services increased
its credit limit to $1.3 billion from $700 million, with an
amendment to its Senior Secured revolving credit facility. The
increase in its credit capability was primarily to lower its
costs and expand its borrowing capabilities.
The series of transactions to generate additional cash while
returning the excess cash to shareholders emphasize the fact that
the company is probably looking at some strategic acquisitions
and at the same time retaining investor confidence.
Currently, Quanta carries a Zacks Rank #3 (Hold). However,
some better-ranked energy and utility stocks include
AO Smith Corp.
). All these carry a Zacks Rank #1 (Strong Buy).
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VSE CORP (VSEC): Free Stock Analysis Report
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