MasTec Completes Previously Announced Acquisition of Henkels & McCoy Group, Inc.

Rhea-AI Summary

MasTec has completed its acquisition of Henkels & McCoy Group, valued at approximately $600 million. This strategic move enhances MasTec's market position as the leading utility contractor, bolstering its capabilities in renewable energy and infrastructure services. The acquisition brings over 5,100 Henkels employees into MasTec, expanding its operational scale and service offerings. CEO Jose Mas emphasized that this acquisition allows for diversification into renewable energy, positioning MasTec for future growth in an evolving utility market.

Positive

• Acquisition of Henkels & McCoy enhances MasTec's position in the utility contractor sector.
• Addition of over 5,100 employees strengthens operational capacity.
• Exposure to the growing renewable energy market increases future growth potential.

Negative

• Integration challenges may arise from merging two large organizations.
• Potential financial strain from the $600 million acquisition cost.

CORAL GABLES, Fla., Dec. 30, 2021 /PRNewswire/ -- MasTec, Inc. (NYSE: MTZ) today announced today that it has closed its previously announced acquisition of Henkels & McCoy Group, Inc. ("Henkels"), the 5^th largest U.S. utility contractor in the recent 2021 Engineering News-Record ranking, in a cash and stock transaction valued at approximately $600 million.

Jose Mas, MasTec's Chief Executive Officer, commented, "We are pleased to officially welcome the more than 5,100 Henkels team members to the MasTec family. We believe that the addition of Henkels, coupled with MasTec's existing operations, creates a market leading utility contractor with significant expertise, scale and capacity that can provide a complete and compelling suite of service offerings to our customers as they work to transition to renewable energy generation, modernize power grid systems and reduce carbon emissions."

Mr. Mas continued, "This marks an important step in the diversification of MasTec's end market portfolio of services, providing us strong strategic growth opportunities. We believe the transition to renewable power generation will create significant growth demand across the utility sector.  MasTec's suite of services, from clean energy power generation to our newly expanded power transmission and distribution capacity, positions us for strong growth in this expanding market."

MasTec, Inc. is a leading infrastructure construction company operating mainly throughout North America across a range of industries.  The Company's primary activities include the engineering, building, installation, maintenance and upgrade of utility, communications, and other infrastructure, such as: electric power transmission and distribution, wireless, wireline/fiber, and customer fulfillment activities; natural gas pipeline and distribution infrastructure; renewable and conventional power generation; heavy civil, and industrial infrastructure.  MasTec's customers are primarily in these industries.  The Company's corporate website is located at www.mastec.com.  The Company's website should be considered as a recognized channel of distribution, and the Company may periodically post important, or supplemental, information regarding contracts, awards or other related news and webcasts on the "Events & Presentations" page in the "Investors" section therein.

This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act. These statements are based on currently available operating, financial, economic and other information, and are subject to a number of significant risks and uncertainties. A variety of factors, many of which are beyond our control, could cause actual future results to differ materially from those projected in the forward-looking statements. Specific factors that might cause such a difference include, but are not limited to: risks related to completed or potential acquisitions, including the acquisition of Henkels & McCoy Group, Inc., as well as the ability to identify suitable acquisition or strategic investment opportunities, to integrate acquired businesses within expected timeframes and to achieve the revenue, cost savings and earnings levels from such acquisitions at or above the levels projected, including the risk of potential asset impairment charges and write-downs of goodwill; risks related to adverse effects of health epidemics and pandemics or other outbreaks of communicable diseases, such as the COVID-19 pandemic, including its effect on supply chain or inflationary issues, as well as, the potential effects of the recently proposed vaccine mandates; market conditions, technological developments, regulatory or policy changes, including permitting processes and tax incentives that affect us or our customers' industries; the effect of federal, local, state, foreign or tax legislation and other regulations affecting the industries we serve and related projects and expenditures; the effect on demand for our services of changes in the amount of capital expenditures by our customers due to, among other things, economic conditions, including potential adverse effects of public health issues, such as the COVID-19 pandemic on economic activity generally, the availability and cost of financing, and customer consolidation in the industries we serve; activity in the industries we serve and the impact on our customers' expenditure levels caused by fluctuations in commodity prices, including for oil, natural gas, electricity and other energy sources; our ability to manage projects effectively and in accordance with our estimates, as well as our ability to accurately estimate the costs associated with our fixed price and other contracts, including any material changes in estimates for completion of projects and estimates of the recoverability of change orders;  the timing and extent of fluctuations in operational, geographic and weather factors affecting our customers, projects and the industries in which we operate; the highly competitive nature of our industry and the ability of our customers, including our largest customers, to terminate or reduce the amount of work, or in some cases, the prices paid for services, on short or no notice under our contracts, and/or customer disputes related to our performance of services and the resolution of unapproved change orders; our dependence on a limited number of customers and our ability to replace non-recurring projects with new projects; the effect of state and federal regulatory initiatives, including costs of compliance with existing and potential future safety and environmental requirements, including with respect to climate change; risks associated with potential environmental issues and other hazards from our operations; disputes with, or failures of, our subcontractors to deliver agreed-upon supplies or services in a timely fashion, and the risk of being required to pay our subcontractors even if our customers do not pay us; risks related to our strategic arrangements, including our equity investments; any exposure resulting from system or information technology interruptions or data security breaches; any material changes in estimates for legal costs or case settlements or adverse determinations on any claim, lawsuit or proceeding;  the adequacy of our insurance, legal and other reserves; the outcome of our plans for future operations, growth and services, including business development efforts, backlog, acquisitions and dispositions; our ability to maintain a workforce based upon current and anticipated workloads; our ability to attract and retain qualified personnel, key management and skilled employees, including from acquired businesses, and our ability to enforce any noncompetition agreements; fluctuations in fuel, maintenance, materials, labor and other costs; risks associated with volatility of our stock price or any dilution or stock price volatility that shareholders may experience in connection with shares we may issue as consideration for earn-out obligations or as purchase consideration in connection with past or future acquisitions, or as a result of other stock issuances; restrictions imposed by our credit facility, senior notes and any future loans or securities; our ability to obtain performance and surety bonds; risks related to our operations that employ a unionized workforce, including labor availability, productivity and relations, as well as risks associated with multiemployer union pension plans, including underfunding and withdrawal liabilities; risks associated with operating in or expanding into additional international markets, including risks from fluctuations in foreign currencies, foreign labor and general business conditions and risks from failure to comply with laws applicable to our foreign activities and/or governmental policy uncertainty; a small number of our existing shareholders have the ability to influence major corporate decisions; as well as other risks detailed in our filings with the Securities and Exchange Commission. We believe these forward-looking statements are reasonable; however, you should not place undue reliance on any forward-looking statements, which are based on current expectations. Furthermore, forward-looking statements speak only as of the date they are made. If any of these risks or uncertainties materialize, or if any of our underlying assumptions are incorrect, our actual results may differ significantly from the results that we express in, or imply by, any of our forward-looking statements. These and other risks are detailed in our filings with the Securities and Exchange Commission. We do not undertake any obligation to publicly update or revise these forward-looking statements after the date of this press release to reflect future events or circumstances, except as required by applicable law. We qualify any and all of our forward-looking statements by these cautionary factors.

 

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SOURCE MasTec, Inc.

FAQ

What is the value of MasTec's acquisition of Henkels & McCoy Group?

The acquisition is valued at approximately $600 million.

How does the acquisition of Henkels affect MasTec's market position?

The acquisition strengthens MasTec's position as a leading utility contractor with expanded service offerings.

What impact will the acquisition have on MasTec's workforce?

The acquisition adds over 5,100 Henkels employees to MasTec's workforce.

What strategic opportunities does MasTec expect from the acquisition?

MasTec expects to capitalize on growth in renewable energy and enhanced infrastructure services.

When was the acquisition of Henkels & McCoy Group completed?

The acquisition was completed on December 30, 2021.