Mastech to acquire IEA in cash-and-stock deal valued at about $1.1 billion

Infrastructure construction company MasTec Inc.
MTZ,
-12.08%
said Monday it has agreed to acquire IEA in a cash-and-stock deal valued at about $1.1 billion. IEA is a services provider in renewable energy and infrastructure that serves a range of blue-chip companies. It has completed more than 260 utility-scale wind and solar projects in North America, including public and private infrastructure construction projects. Under the terms of the deal, IEA shareholders will receive $14 a share in the form of $10.50 per share in cash and 0.0483 of a MasTec share. The deal offers a 34% premium over IEA’s closing stock price on Friday and is expected to close in the fourth quarter. MasTec is expecting to issue 2.8 million shares in the transaction. IEA said it’s still expecting full-year revenue of $2.3 billion to $2.5 billion with net income of $45 to $51 million. For 2023, MasTec expects IEA to generate revenue of $2.6 billion to $2.7 billion. The company updated its own guidance to reflect higher costs in the second half. The company is expecting full-year revenue of about $9.2 billion with net income of abut $95 billion or $1.24 a share. “While our expected second-half 2022 performance represents a 280-basis point improvement in adjusted EBITDA margin rate versus first half 2022 results, our current expectation reflects higher expected project costs, inefficiencies and delays including the impact of higher fuel, labor and material costs from sustained levels of inflation,” Chief Executive Jose Mas said in a statement. MasTec shares fell 1.4% premarket. IEA shares were up 31.7% before a trading halt, and are up 13% in the year to date through Friday, while the S&P 500
SPX,
+0.08%
has fallen 17%.