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Dycom To Acquire Telecommunications Infrastructure Services Subsidiaries From Quanta Services

Stocks in this article: DY PWR

PALM BEACH GARDENS, Fla., Nov. 19, 2012 /PRNewswire/ -- Dycom Industries, Inc. (NYSE: DY) announced today that it has entered into a definitive agreement with Quanta Services, Inc. (NYSE: PWR) to acquire substantially all of Quanta's domestic telecommunications infrastructure services subsidiaries for approximately $275 million in cash.

The acquired subsidiaries provide specialty contracting services, including engineering, construction, maintenance and installation services to telecommunications providers, and other construction and maintenance services to electric and gas utilities and others.  Principal business facilities are located in Arizona, California, Florida, Georgia, Minnesota, New York, Pennsylvania, and Washington.

The acquired subsidiaries currently operate in 49 states, serve over 300 individual customers and employ more than 2,400 personnel. Trailing 12 month revenues to September 30, 2012 were approximately $535 million of which approximately $138 million related to projects funded in part by The American Recovery and Reinvestment Act of 2009 ("ARRA").

"This transaction strategically strengthens our customer base, geographic scope, and technical service offerings," said Steven Nielsen, President and Chief Executive Officer of Dycom.  "It significantly enhances our rural telecommunications engineering and construction capabilities, provides additional construction resources for wireless carriers and reinforces our already robust competence in broadband construction. Given recent industry announcements indicating growing expenditures from our customers and a very attractive financing environment, we believe this is the right time to increase our scale."

Subject to customary closing conditions, the acquisition is expected to be completed by December 31, 2012.  The acquired subsidiaries are currently expected to produce calendar year 2013 revenues ranging from $400 million to $450 million.  Excluding one-time transaction and integration costs of approximately $12 million to $15 million, the acquisition is currently expected to produce $0.05 to $0.10 per share of earnings accretion on an annual basis, after non-cash amortization expense.

The purchase price of approximately $275 million, which is subject to adjustments for working capital and other specified items, will be financed with a new $400 million senior secured credit facility arranged and syndicated by Bank of America Merrill Lynch and Wells Fargo Securities, LLC.

Goldman, Sachs & Co. and Barclays acted as financial advisors to Dycom. Shearman & Sterling LLP served as Dycom's outside legal counsel.

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