Dycom to Acquire Quanta's Telecom Service Subsidiaries
November 30, 2012
By Mini Swamy
, TMCnet Contributor
Dycom Industries, a provider of specialty telecommunications contracting services, has decided to strengthen its technical offerings, increase its customer base and extend its geographic presence by acquiring all the domestic telecommunications infrastructure services units of Quanta Services.
It signed a definitive agreement to this effect for approximately $275 million in cash.
The acquired subsidiaries currently operates in 49 states, serves more than 300 individual customers and employs more than 2,400 personnel. Subject to regulatory approvals, the deal is expected to be closed by Dec. 31, 2012.
Goldman, Sachs & Co. and Barclays acted as financial advisors to Dycom. Shearman & Sterling LLP served as Dycom's outside legal counsel.
Company officials noted that the increase in customer investment and an attractive financing environment acted as an impetus to increase the scale of operation.
The acquired subsidiaries, which provide construction, maintenance and installation services to telecommunications providers, electric and gas utilities and others, is expected to complement Dycom’s existing services.
"This transaction strategically strengthens our customer base, geographic scope, and technical service offerings," noted Steven Nielsen, president and CEO at Dycom.
Nielsen also added that the acquisition would enhance Dycom’s rural telecommunications engineering and construction capabilities, provide additional construction resources for wireless carriers and reinforce the company’s robust competence in broadband construction.
Revenue generated by Quanta over the last year was about $535 million and the acquired units are expected to produce revenues of $400 million to $450 million in the calendar year 2013.
A conference call to review the company's first quarter of fiscal 2013 results and the announced acquisition was hosted on Nov. 20, 2012. A replay of the live webcast and the conference call materials will be available at the company website till Dec. 20, 2012.
Want to learn more about the latest in communications and technology? Then be sure to attend ITEXPO Miami 2013, Jan 29- Feb. 1 in Miami, Florida. Stay in touch with everything happening at ITEXPO (News - Alert). Follow us on Twitter.
Edited by Rachel Ramsey