Quanta Services, Inc. (NYSE: PWR) today announced that on Oct. 22, 2010, it signed a definitive agreement to acquire Valard Construction, one of Canada's largest electric power line contractors.
The transaction, which is expected to close today, is valued at approximately US$219 million, which is inclusive of any debt repaid at closing. The acquisition strategically expands Quanta's Canadian service offering and provides Valard's diverse customer base with access to Quanta's extensive energy infrastructure resources.
The purchase price for Valard will be paid through a combination of cash, Quanta common shares and exchangeable shares of a Canadian subsidiary of Quanta Services that are substantially equivalent to, and exchangeable on, a one-for-one basis for Quanta Services common shares. In connection with the acquisition, the stockholders of Valard will receive approximately $118.9 million in cash and an aggregate of approximately 4.5 million in common and exchangeable shares.
"Canada, as the world's second largest exporter of electricity, presents significant emerging and long-term opportunities to expand and upgrade the electric transmission infrastructure," said John R. Colson, chairman and CEO of Quanta Services. "We expect Valard's revenue to be between $225 million and $250 million in 2011 and the transaction to be accretive to EPS in 2011 and beyond."
Valard, based out of Edmonton, Alberta, will operate as a platform operating unit of Quanta, with Victor Budzinski as CEO and Adam Budzinski as president. Valard's workforce of more than 700 employees delivers full engineering, procurement and construction (EPC) services and turnkey solutions to the Canadian power industry. In addition to high-voltage transmission lines, Valard builds distribution infrastructure, provides EPC services for substations and installs fiber optic systems.
"For more than 30 years, Valard has been safely building and maintaining electric power infrastructure across some of Canada's most challenging, rugged terrain, often in arctic conditions," Colson continued. "The expertise of their team is a welcome addition to our company and upholds our commitment to deliver value to our stockholders, our customers and our employees."
"As part of the Quanta team, we believe Valard will be able to deliver additional services through access to a much larger workforce and vast equipment resources," said Adam Budzinski, president of Valard. "It is a logical combination of resources that builds upon our strong foundation of safety, value and efficiency to meet the evolving needs of our customers."