Quanta Services To Acquire Price Gregory

November 2009 Vol. 64 No. 11

Quanta Services Inc. has announced that it has signed a definitive agreement to acquire privately held Price Gregory Services Inc., a leading natural gas and oil transmission pipeline infrastructure service provider in North America, in a cash and stock transaction valued at approximately $350 million. Under the terms of the agreement, Quanta will issue approximately 11.1 million shares of Quanta common stock, valued at $250 million, and will pay approximately $100 million in cash, subject to adjustment, to the stockholders of Price Gregory.

Price Gregory is the leading energy infrastructure services provider of its kind, specializing in the construction of large diameter transmission pipelines. Building on Quanta’s leadership role in the electric power transmission industry, the acquisition of Price Gregory strongly positions Quanta as a leader in the North American energy transmission infrastructure market and will enable the company to take advantage of the positive long-term outlook for the natural gas industry.

Furthermore, the transaction is expected to result in substantial accretion to Quanta’s EPS, increase revenues and strengthen margins, and to generate significant free cash flow to continue to fund the company’s growth strategy.

While demand for transmission pipeline construction has recently been impacted by the recession and low natural gas and oil prices, substantial growth is projected over the next decade. There are currently more than 50 major pipeline projects approved or under construction in the U.S.

Price Gregory was formed on Jan. 31, 2008 through the combination of H.C. Price Company and Gregory & Cook Construction Inc. With roots dating back to the 1920s, the companies have played a significant role in the build out of the transmission pipeline infrastructure across the U.S.

The transaction, which is subject to customary closing conditions and regulatory approvals, is expected to close in the fourth quarter of 2009.