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Quanta Services, Inc. (NYSE: PWR) and InfraSource Services, Inc. (NYSE:
IFS) today announced that they have signed a definitive merger agreement
under which Quanta will acquire InfraSource in an all-stock transaction
valued at $1.26 billion based on Quanta’s
closing stock price on March 16, 2007. The combination of Quanta and
InfraSource will create a leading specialized contracting services
company serving the electric power, natural gas, telecommunications and
cable television industries. Empowered by a broad national footprint,
flexible workforce, extensive equipment resources and innovative
technologies, the combined company will partner with customers to meet
the immediate and growing need for strategic infrastructure solutions.
Under the terms of the merger agreement, approved by both Boards of
Directors, InfraSource stockholders will receive 1.223 shares of Quanta
common stock for each outstanding common share of InfraSource they own
at closing. This represents a per share value of $30.13, or a 17.4%
premium over the closing price of InfraSource common stock on March 16,
2007. Upon closing, on a fully diluted basis, Quanta and InfraSource
stockholders are expected to own approximately 75% and 25%,
respectively, of the combined company. Based on 2006 results, the
combined company would have revenues of over $3.1 billion and adjusted
EBITDA of over $270 million. The transaction is expected to be accretive
to Quanta’s earnings per share in 2008.
“The addition of InfraSource’s
complementary businesses, strategic geographic footprint and talented
employees will enhance Quanta’s resources
and expand our service portfolio. As a combined company, we will be
well-positioned to serve all of our customers during a period of rapid
growth and increased transmission and distribution spending,”
said John R. Colson, chairman and chief executive officer of Quanta. “We
intend to leverage our combined workforce of more than 16,000 employees
to provide expanded services to our customers in both planned and
emergency situations.”
Colson added, “We expect the combination to
result in meaningful cost and operational synergy opportunities,
including the integration of project and asset management functions,
improved resource utilization, procurement and administrative cost
savings, and enhanced cross-selling and marketing opportunities.”
David R. Helwig, chairman and chief executive officer of InfraSource,
commented, “This transaction represents a
tremendous opportunity for our customers, stockholders and employees to
share in the significant upside potential of a stronger combined
business. Together, InfraSource and Quanta will create an
industry-leading company with the scale and scope necessary to meet the
growing infrastructure needs of energy and communications providers
across North America.”
The combined company will have the ability to provide customers expanded
infrastructure service offerings from design and engineering, to
installation and maintenance, to energized services and emergency
restoration. Along with enhancing and complementing Quanta’s
electric power transmission and distribution capabilities, InfraSource
brings strength in substation engineering and installation, gas
distribution capabilities and dark fiber leasing to the combined
company. In addition, Quanta’s nationwide
footprint will be strengthened, providing the company a broader platform
from which to grow its services.
The combined company’s additional resources
and superior service portfolio also position it to take advantage of
positive industry dynamics, which include electric utility companies’
increased spending and outsourcing trends. In the power industry, the
need to upgrade the nation’s aging and
congested transmission and distribution grid and the Energy Policy Act
of 2005 are expected to continue to drive increased investment in
infrastructure. Additionally, utilities continue to move toward
outsourcing as a way to reduce costs while gaining superior service and
improved flexibility. In the telecommunications industry, the
convergence of voice, video and data is creating increased demand for
fiber infrastructure to support the delivery of key next-generation
services.
The transaction is expected to close in the third quarter of 2007
subject to stockholder and customary regulatory approvals. Quanta and
InfraSource intend to file a joint proxy statement/prospectus with the
Securities and Exchange Commission.
Credit Suisse Securities (USA) LLC is acting as financial advisor to
Quanta, and Akin Gump Strauss Hauer and Feld, LLP is serving as its
legal advisor. Citigroup Corporate and Investment Banking is acting as
financial advisor to InfraSource and Ballard Spahr Andrews & Ingersoll,
LLP is serving as its legal advisor.
The calculation of adjusted EBITDA, as used in this press release, can
be viewed at the “Acquisition Announcement”
section of Quanta’s website at www.quantaservices.com
and “Investors”
section of the InfraSource website at www.infrasourceinc.com.
Conference Call and Webcast Information
Quanta and InfraSource have scheduled a conference call for today, March
19, at 9:00 a.m. Eastern Daylight Savings Time. To participate in the
call, dial 866-425-6195 at least 10 minutes before the conference call
begins and ask for the Quanta Services conference call. Investors,
analysts and the general public also will have the opportunity to listen
to the conference call over the Internet by visiting the companies’
websites at www.quantaservices.com
in the “Investor Center”
section and www.infrasourceinc.com
in the “Investors”
section and a replay will be available on these websites for 30 days
following the conference call. To listen to the call live on the web,
please visit the Quanta Services or InfraSource Services website at
least fifteen minutes early to register, download and install any
necessary audio software. The materials presented during the webcast
will be posted on the websites as referenced above.
About Quanta Services, Inc.
Quanta Services, Inc. (NYSE: PWR) is a leading provider of specialized
contracting services, delivering end-to-end network solutions for the
electric power, gas, telecommunications and cable television industries.
The company’s comprehensive services include
designing, installing, repairing and maintaining network infrastructure
nationwide.
About InfraSource Services, Inc.
InfraSource Services, Inc. (NYSE: IFS) is a specialty contractor
servicing utility transmission and distribution infrastructure in the
United States. InfraSource designs, builds and maintains transmission
and distribution networks for utilities, power producers and industrial
customers.
Additional Information and Where to
Find It
In connection with the proposed acquisition, Quanta and InfraSource will
file with the Securities and Exchange Commission a joint proxy
statement/prospectus and other documents regarding the proposed
transaction. A joint proxy statement/prospectus will be sent to
stockholders of Quanta and InfraSource, seeking their approval of the
transaction. STOCKHOLDERS OF QUANTA AND INFRASOURCE ARE URGED TO READ
CAREFULLY THE JOINT PROXY STATEMENT/PROSPECTUS WHEN IT BECOMES AVAILABLE
BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION ABOUT QUANTA, INFRASOURCE,
AND QUANTA’S ACQUISITION OF INFRASOURCE.
Such proxy statement/prospectus, when available, and other relevant
documents may be obtained, free of charge, on the Securities and
Exchange Commission’s website (http://www.sec.gov).
The joint proxy statement/prospectus and such other documents (relating
to Quanta) may also be obtained for free from Quanta’s
website at www.quantaservices.com
or from Quanta by directing a request to Quanta Services, Inc., 1360
Post Oak Blvd., Suite 2100, Houston, TX 77056, Attention: Corporate
Secretary, or by phone at 713-629-7600.
The joint proxy statement/prospectus and such other documents (relating
to InfraSource) may also be obtained for free from InfraSource’s
website at www.infrasourceinc.com
or from InfraSource by directing a request to InfraSource Services,
Inc., 100 W. Sixth Street, Media, PA 19063, Attention: General Counsel,
or by phone at 610-480-8000.
Participants in the Solicitation
Quanta, its directors, executive officers and certain members of
management and employees may be considered “participants
in the solicitation” of proxies from Quanta’s
stockholders in connection with the acquisition. Information about
Quanta and its directors and executive officers and their ownership of
Quanta securities will be contained in the joint proxy
statement/prospectus when it is filed with the SEC.
InfraSource, its directors, executive officers and certain members of
management and employees may be considered “participants
in the solicitation” of proxies from
InfraSource’s stockholders in connection
with the acquisition. Information about InfraSource and its directors
and executive officers and their ownership of InfraSource securities
will be contained in the joint proxy statement/prospectus when it is
filed with the SEC.
Forward-Looking Statements
Statements about Quanta’s and InfraSource’s
outlook and all other statements in this release (and statements made
regarding the subjects of this release, including on the conference call
announced herein) other than historical facts are forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements rely on a number of
assumptions concerning future events and are subject to a number of
uncertainties and factors, many of which are outside Quanta’s
and InfraSource’s control, which could cause
actual results to differ materially from such statements.
Forward-looking information includes, but is not limited to, statements
regarding the new combined company, including Quanta’s
and InfraSource’s expected combined
financial and operating results, accretion to Quanta’s
earnings per share arising from the transaction, the expected amount and
timing of cost savings and operating synergies, and whether and when the
transactions contemplated by the merger agreement will be consummated.
There are a number of risks and uncertainties that could cause results
to differ materially from those indicated by such forward-looking
statements, including the failure to effectively integrate the combined
operations and realize anticipated savings and synergies; the inability
to obtain approvals from, and the results of the review of the proposed
transaction by, various regulatory agencies; unexpected costs or
unexpected liabilities that may arise from the transaction, whether or
not consummated; the effects of purchase accounting, including the
determination of amortizable intangibles, on the combined companies
future operating results; the potential adverse impact to the businesses
of the companies as a result of uncertainty surrounding the transaction,
including the inability to retain key personnel; the potential adverse
effect of any conditions imposed on Quanta or InfraSource in connection
with consummation of the merger; the failure to receive the approval of
the merger by the stockholders of InfraSource or the failure to receive
the approval of the issuance of Quanta common stock in connection with
the merger by the stockholders of Quanta; the failure to satisfy various
other conditions to the closing of the merger contemplated by the merger
agreement; future regulatory or legislative actions that could adversely
affect the companies or the failure of the Energy Policy Act of 2005 to
result in increased spending by customers; and the potential adverse
effect of other economic, business, and/or competitive factors on the
combined companies. These forward-looking statements are also affected
by the risk factors, forward-looking statements and challenges and
uncertainties described in Quanta’s and
InfraSource’s respective Form 10-K reports
for the fiscal year ended December 31, 2006 and any other filings with
the Securities and Exchange Commission, which are available free of
charge on the SEC’s website at http://www.sec.gov
and through Quanta’s and InfraSource’s
websites at www.quantaservices.com
and www.infrasourceinc.com.
Quanta and InfraSource expressly disclaim any intention or obligation to
revise or update any forward-looking statements whether as a result of
new information, future events, or otherwise.