MasTec Pays $150 Million for Precision Pipeline
MasTec Inc. has signed a definitive agreement to acquire Precision Pipeline, a leading natural gas, crude oil and refined products transmission pipeline infrastructure services provider in North America for a purchase consideration of $150 million. The transaction is contingent on financing availability on terms and conditions acceptable to MasTec, in its sole discretion, and there is no break-up fee if such financing is not available.
Based in Eau Claire, Wis., Precision is a leading energy infrastructure services provider, specializing in the construction and maintenance of large diameter pipelines. Precision’s experience in the long-haul, interstate pipeline industry will complement MasTec’s existing energy infrastructure service offerings, which include natural gas gathering systems, processing plants, compression stations and mid-stream pipelines.
Precision employs a team of highly skilled unionized workers and tradesmen, which it deploys throughout North America, and the company uses a significant pool of specialized pipeline construction equipment. With the acquisition of Precision, MasTec will become one of the leading pipeline contractors in the United States, capable of providing a full array of construction services to oil and gas producers, as well as mid-stream and interstate pipeline operators.
Precision has experienced significant growth over the past several years.
Precision generated $303 million of revenue and $37 million in earnings before interest, taxes, depreciation and amortization (EBITDA) in 2007 and $507 million of revenue and $93 million in EBITDA in 2008. For the full year of 2009, Precision estimates revenue of slightly less than $300 million and about $60 million EBITDA.
The reduction in earnings in 2009 as compared to 2008 is primarily due to lower revenue as the result of a softer natural gas and petroleum pipeline construction market amidst the recession. Precision had over $500 million in backlog as of Sept. 30.
“We are very pleased with the acquisition of Precision,” says Jose Mas, MasTec’s president and CEO.
“The company has an excellent and motivated management team that will remain in place to continue its growth. With the acquisition of Precision, we will significantly expand our capabilities in the natural gas, crude oil and refined petroleum product pipeline industries, which we believe will be solid areas of growth for years to come.” |
