Quanta Services
Encyclopedia
Quanta Services is a U.S. corporation
that provides outsourced construction, maintenance, and technology services for electric power
, telecommunications, broadband
cable, and gas pipeline industries. Capabilities include the planning, design, installation, maintenance and repair of most types of network infrastructure
. In June 2009, Quanta Services was added to the S&P 500
index, replacing Ingersoll-Rand.
Quanta Services employs about 8,000 people full time, 5,000 on a 1099 form and its operating companies achieved combined revenues of about $3.8 billion in 2008. It is headquartered in Houston, Texas
.
and power distribution networks.
The company quickly grew from $152 million in revenue in its first year to more than $2 billion in 2000. In addition to the telecommunications and power industries, Quanta soon started to develop capabilities in natural gas infrastructure, and has also expanded into a variety of specialty services. This includes several non-contracting businesses such as Quanta Technology
(consulting), Realtime Utility Engineers (design engineering for power), and Engineering Associates (design engineering for telecom).
Colson's initial job was to carry stakes for a survey team. Within three years he was named manager of engineering services, and after six he had worked his way up to vice-president of operations. After becoming executive vice-president and general manager in the early 1980s, he began buying the company, became president in 1991, and ultimately emerged as its owner.
A secondary offering was completed in late January 1999. The company had planned to sell 3.5 million shares at $21 per share, but interest was so strong that in the end 4.6 million shares were sold at $23.25 per share. All told, Quanta realized $101.1 million, money used to fund the acquisition of 40 additional companies, which in total cost $323.6 million in cash and notes and 15 million shares of stock. Many of these additions were made to expand Quanta's business in gas transmission and cable television.
), an energy company with whom PAR had been doing business since the 1950s, began taking steps to gain control of Quanta. UtiliCorp owned about 36 percent of Quanta, an investment that was originally part of a strategic alliance when UtiliCorp outsourced all of its maintenance needs to Quanta. Quanta resisted, and in October 2001 the two parties signed a standstill agreement. A month later Quanta adopted a "poison pill
" plan to prevent a takeover, prompting UtiliCorp to sue. A proxy fight
ensued in the spring of 2002. Quanta maintained that UtiliCorp, which was enduring difficult times, wanted to gain controlling interest in order to consolidate Quanta's earnings with its own balance sheet. The fight came to an end in May 2002, as Quanta fended off the takeover bid.
and InfraSource Services as No. 8. This acquisition received popular attention after being given positive coverage on Jim Cramer's Mad Money
show, in Smart Money, and in TheStreet.
In September 2009, Quanta Services announced that a deal had been struck to acquire Price Gregory, the largest U.S. gas pipeline construction company, for $350 million . With this acquisition, Quanta Services is expected to have consolidated 2009 revenue of $4.4 billion.
On October 22nd 2010, Quanta Services announced agreement to acquire Canada's largest electric power line contractors 'Valard Construction' for approximately US$219 million.
Quanta's Electric Power Operating Units
Quanta's Natural Gas Opearting Units
Quanta's Telecom & Cable Operating Units
Quanta's C&I and Specialty Operating Units
Corporation
A corporation is created under the laws of a state as a separate legal entity that has privileges and liabilities that are distinct from those of its members. There are many different forms of corporations, most of which are used to conduct business. Early corporations were established by charter...
that provides outsourced construction, maintenance, and technology services for electric power
Electric power
Electric power is the rate at which electric energy is transferred by an electric circuit. The SI unit of power is the watt.-Circuits:Electric power, like mechanical power, is represented by the letter P in electrical equations...
, telecommunications, broadband
Broadband
The term broadband refers to a telecommunications signal or device of greater bandwidth, in some sense, than another standard or usual signal or device . Different criteria for "broad" have been applied in different contexts and at different times...
cable, and gas pipeline industries. Capabilities include the planning, design, installation, maintenance and repair of most types of network infrastructure
Infrastructure
Infrastructure is basic physical and organizational structures needed for the operation of a society or enterprise, or the services and facilities necessary for an economy to function...
. In June 2009, Quanta Services was added to the S&P 500
S&P 500
The S&P 500 is a free-float capitalization-weighted index published since 1957 of the prices of 500 large-cap common stocks actively traded in the United States. The stocks included in the S&P 500 are those of large publicly held companies that trade on either of the two largest American stock...
index, replacing Ingersoll-Rand.
Quanta Services employs about 8,000 people full time, 5,000 on a 1099 form and its operating companies achieved combined revenues of about $3.8 billion in 2008. It is headquartered in Houston, Texas
Texas
Texas is the second largest U.S. state by both area and population, and the largest state by area in the contiguous United States.The name, based on the Caddo word "Tejas" meaning "friends" or "allies", was applied by the Spanish to the Caddo themselves and to the region of their settlement in...
.
Overview
Quanta Services was founded in 1997 to create an integrated, comprehensive and nationwide network of infrastructure contractors to meet the evolving needs of electric utility and telecommunications companies. With deregulation driving fundamental changes in the electric power industry, the founders anticipated a dramatic expansion in outsourcing of the design, installation, repair and maintenance of power transmissionPower transmission
Power transmission is the movement of energy from its place of generation to a location where it is applied to performing useful work.Power is defined formally as units of energy per unit time...
and power distribution networks.
The company quickly grew from $152 million in revenue in its first year to more than $2 billion in 2000. In addition to the telecommunications and power industries, Quanta soon started to develop capabilities in natural gas infrastructure, and has also expanded into a variety of specialty services. This includes several non-contracting businesses such as Quanta Technology
Quanta Technology
Quanta Technology LLC is a utility infrastructure consulting company based in Raleigh, North Carolina. It is a wholly owned subsidiary of Quanta Services.-Overview:...
(consulting), Realtime Utility Engineers (design engineering for power), and Engineering Associates (design engineering for telecom).
Colson and PAR
The man behind the creation of Quanta Services is its current chief executive officer and chairman, John R. Colson. After earning a degree in geology from the University of Missouri at Kansas City, Colson entered the military and served one year in Vietnam. He was discharged from the Army in 1971 and returned to Kansas City, taking temporary employment at PAR Electrical Contractors, Inc., which built high-voltage transmission lines, distribution lines, and substations, and provided other electric utility infrastructure services.Colson's initial job was to carry stakes for a survey team. Within three years he was named manager of engineering services, and after six he had worked his way up to vice-president of operations. After becoming executive vice-president and general manager in the early 1980s, he began buying the company, became president in 1991, and ultimately emerged as its owner.
Initial Formation
In the 1990s, the electrical contracting business was highly fragmented, populated by more than 50,000 companies, the vast majority of which were small, owner-operated enterprises. Deregulation in the electric utility industries in a number of states prompted utilities to become more cost-competitive, leading to the outsourcing of infrastructure work to contractors who could do the job more efficiently. Moreover, much of the transmission and distribution infrastructure in the United States was aging and in need of repair or replacement. In 1997, Colson spearheaded the combination of four contractors to form Quanta Services, Inc., which then established its headquarters in Houston with Colson as its head. In addition to PAR, Quanta consisted of Union Power Construction Co., Trans Tech Electric Inc., and Potelco, Inc.Initial Public Offering
With BT Alex Brown Incorporated, BancAmerica Robertson Stephens, and Sanders Morris Mundy Inc. serving as underwriters, Quanta completed its IPO in February 1998, raising $45 million. Of that amount, $21 million was used to pay the cash portion of the buyouts of the four founding companies. Much of the balance, along with a $175 million line of credit arranged with a consortium of nine banks, was used on over a dozen acquisitions completed in 1998. Acquired telecom companies included Manuel Brothers; Smith Contracting; Telecom Network Specialists; North Pacific Construction Company; NorAm Telecommunications; Spalj Construction Company; and Golden State Utility Company. Acquired electric contractors included Harker & Harker; Sumter Builders; and Environmental Professional Associates. Hybrid acquisitions included Wilson Roadbores and Underground Construction Company.A secondary offering was completed in late January 1999. The company had planned to sell 3.5 million shares at $21 per share, but interest was so strong that in the end 4.6 million shares were sold at $23.25 per share. All told, Quanta realized $101.1 million, money used to fund the acquisition of 40 additional companies, which in total cost $323.6 million in cash and notes and 15 million shares of stock. Many of these additions were made to expand Quanta's business in gas transmission and cable television.
Attempted Takeover
In 2001 UtiliCorp United Inc. (now Aquila, Inc.Aquila, Inc.
Aquila, Inc. was an electricity and natural gas distribution network headquartered in Kansas City, Missouri in the United States. The company also owned and operated power generation assets...
), an energy company with whom PAR had been doing business since the 1950s, began taking steps to gain control of Quanta. UtiliCorp owned about 36 percent of Quanta, an investment that was originally part of a strategic alliance when UtiliCorp outsourced all of its maintenance needs to Quanta. Quanta resisted, and in October 2001 the two parties signed a standstill agreement. A month later Quanta adopted a "poison pill
Poison pill
A shareholder rights plan, colloquially known as a "poison pill", or simply "the pill" is a type of defensive tactic used by a corporation's board of directors against a takeover...
" plan to prevent a takeover, prompting UtiliCorp to sue. A proxy fight
Proxy fight
A proxy fight or proxy battle is an event that may occur when a corporation's stockholders develop opposition to some aspect of the corporate governance, often focusing on directorial and management positions. Corporate activists may attempt to persuade shareholders to use their proxy votes A proxy...
ensued in the spring of 2002. Quanta maintained that UtiliCorp, which was enduring difficult times, wanted to gain controlling interest in order to consolidate Quanta's earnings with its own balance sheet. The fight came to an end in May 2002, as Quanta fended off the takeover bid.
Large Acquisitions
On August 30, 2007, Quanta Services acquired InfraSource Services (NYSE: IFS) through an all stock deal. Before the merger, Engineering News-Record ranked Quanta Services as the second-largest specialty contractor in the United StatesUnited States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
and InfraSource Services as No. 8. This acquisition received popular attention after being given positive coverage on Jim Cramer's Mad Money
Mad Money
Mad Money is an American finance television program hosted by Jim Cramer that began airing on CNBC on March 14, 2005. Its main focus is investment and speculation, particularly in publicly traded stocks...
show, in Smart Money, and in TheStreet.
In September 2009, Quanta Services announced that a deal had been struck to acquire Price Gregory, the largest U.S. gas pipeline construction company, for $350 million . With this acquisition, Quanta Services is expected to have consolidated 2009 revenue of $4.4 billion.
On October 22nd 2010, Quanta Services announced agreement to acquire Canada's largest electric power line contractors 'Valard Construction' for approximately US$219 million.
Operating Companies
Quanta Services has a large number of operating companies that can broadly be classified into Electric & Gas, Telecom & Cable, Wireless, and Ancillary Services. Each typically operates independently. A list of current Quanta Services operating companies is provided below.Quanta's Electric Power Operating Units
- Allteck Line Contractors
- Can-Fer Construction Company
- Dacon
- DashiellCorporation
- Dillard Smith Construction Company
- EHV Power
- InfraSource Underground Services
- Irby Construction Company
- Longfellow Drilling Services
- M.J. Electric
- Mears Group
- North Houston Pole Line
- PAR Electrical Contractors
- Pauley Construction Company
- Potelco
- Quanta Energized Services
- Quanta Government Solutions
- Quanta Renewable Energy Services
- Quanta Technology
- Realtime Utility Engineers
- Ryan Company
- Sumter Utilities
- Underground Construction Company
- Winco Powerline Services
Quanta's Natural Gas Opearting Units
- Bradford Brothers
- Can-Fer Construction Company
- InfraSource Underground Services
- Mears Group
- North Houston Pole Line
- PAR Electrical Contractors
- Price Gregory
Quanta's Telecom & Cable Operating Units
- Blair Park
- Driftwood Electrical
- EA Technical Services
- Engineering Associates
- Fiber Technologies
- Golden State Utility Co.
- H.L. Chapman Pipeline Construction
- InfraSource Telecom
- Manuel Bros.
- North Sky Communications
- Parkside Utility Construction
- Pauley Construction Company
- Professional Teleconcepts
- Quanta Wireless Solutions
- Spalj Construction Company
- Sunesys
- Trawick Construction Company
- Underground Construction Company
- VCI Telcom
- W.C. Communications
Quanta's C&I and Specialty Operating Units
- Croce Electric
- Intermountain Electric
- VCI Construction