Quanta Services pays $1.5 billion to acquire Cupertino Electric
Quanta Services announced that it has completed the acquisition of Cupertino Electric Inc. (CEI), an electrical contractor and solar EPC headquartered in San Jose, California. CEI now joins fellow solar contractors Blattner, Ryan Companies and RPCS under the Quanta banner.
“We are excited to announce the acquisition of CEI, a company we have admired for more than a decade, and we welcome CEI’s employees to the Quanta family,” said Duke Austin, Quanta’s President and CEO. “CEI brings an exceptional management team and a premier craft-skilled workforce that complements Quanta’s culture and will create a comprehensive electrical infrastructure solution offering that we believe can facilitate innovative solutions between utilities and large power consumers – from electron generation to transmission to consumption. Further, CEI provides Quanta a low-voltage electrical platform to further diversify and expand our customer base and service offerings. CEI has vibrant end-markets, a strong and visible project backlog and an accretive contribution to Quanta’s growth, cash flow conversion, returns and earnings per share.”
Tom Schott, President and CEO of CEI, said, “The opportunity to strategically partner with Quanta for the next phase of CEI’s growth trajectory is incredibly exciting for our employees and our long-standing customers. The people-first culture and customer-centric mindset that Quanta and CEI share is truly unique and should allow our organizations to accomplish more together than we could alone. This transaction ensures that CEI’s 70-year legacy of great people and projects remains intact, and that going forward CEI will be fueled by support from Quanta and its family of companies.”
CEI’s existing management team will remain in place, with Schott continuing in his leadership role as President and CEO. With a skilled, dedicated and high-quality workforce of approximately 4,300 employees, CEI will serve as a platform operating company of Quanta.
The upfront transaction consideration was approximately $1.54 billion, consisting of approximately $1.3 billion in cash, subject to certain closing adjustments, as well as approximately 883,000 shares of Quanta common stock valued at approximately $225 million. Additionally, there is a potential earnout payment of up to $200 million to the extent certain financial performance targets are achieved during a post-acquisition period. Quanta funded the cash portion of the transaction with a combination of cash on hand, drawings under its existing credit facility and a short-term term loan facility. The transaction closed on July 17, 2024.
King & Spalding LLP is serving as legal advisor to Quanta Services. Lazard is serving as exclusive financial advisor to CEI, and Fenwick & West LLP is serving as legal advisor.
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