US infrastructure builder MasTec (NYSE:MTZ) has agreed to take over renewables-specialising sector player Infrastructure and Energy Alternatives Inc (NASDAQ:IEA) in a cash-and-stock deal worth USD 1.1 billion (EUR 1.08bn), including net debt.
Set up in 2011, IEA provides engineering, procurement, construction and other related services to developers of infrastructure projects. To date, the company has finalised over 260 utility-scale wind and solar projects across North America. In March 2022, Silicon Ranch Corporation contracted IEA to build a 70-MW solar farm in Early County, Georgia.
The acquisition of IEA will expand MasTec's own clean energy and infrastructure division, providing it with incremental service capabilities and union-based clean power generation services, as well as expanding its clean energy maintenance offerings and strengthening its non-union craft labour and equipment resource capacity.
The terms of the deal call for IEA’s stockholders to get USD 14.00 per share in cash and MasTec stock, which represents a 34% premium to IEA's closing stock price on July 22, 2022. The transaction is pending IEA stockholder and regulatory approvals and is seen to close late in the final quarter of the year. Various IEA stockholders have already committed to voting their combined 35% interest in favour of the proposed takeover.
While MasTec plans to rely on other debt financing options to finance the cash portion of the deal, it has secured committed bridge financing from Bank of America and JP Morgan, should it be needed, the company said.
The table below shows certain projections for future revenue contributions from IEA. The 2023 guidance excludes post-transaction synergies.
| Figures in USD |
2022 |
2023 |
| Revenue |
2.3bn-2.5bn |
2.6bn-2.7bn |
| Net profit |
45m-51m |
-- |
| Adj. EBITDA |
140m-150m |
160m-170m |
MasTec also anticipates near-term post transaction annual cost savings of about USD 10 million, mainly from the combination of reduced IEA public company reporting and other costs. When including both transaction finance costs and synergies, IEA's adjusted 2023 net profit is seen at USD 45 million-50 million.
(USD 1 = EUR 0.981)
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St. Joseph Solar Farm project construction site in Indiana. Source: IEA.
