DALLAS, Dec. 14, 2020 (GLOBE NEWSWIRE) -- Primoris Services Corporation (NASDAQ Global Select: PRIM), a leading provider of specialty contracting services in North America, today announced that it has entered into a definitive merger agreement to acquire Future Infrastructure Holdings, LLC from Tower Arch Capital LLC and other interest holders in an all cash transaction valued at $620 million.

Future Infrastructure is a leading provider of non-discretionary maintenance, repair, upgrade and installation services to the telecommunication, regulated gas utility and infrastructure end markets. For the last 12 months ended September 30, 2020, FIH generated total revenue of $342 million, total adjusted earnings before income tax, depreciation and amortization (“adjusted EBITDA”) of $66 million and adjusted EBITDA margin of 19 percent.

Strategic Advantages and Benefits

• Establishes a robust platform in the large and growing Telecommunication Services market; which is benefitting from multi-year tailwinds due to significant fiber deployments to support last-mile broadband capacity, the Internet of Things (“IoT”), 5G technology, and substantial growth in data consumption;
• Complements and further strengthens Primoris’ existing utility services capabilities while introducing a number of potential cross-selling opportunities; and
• Accelerates Primoris’ ongoing portfolio transition towards higher growth, higher margin, and recurring revenue under Master Service Agreements (“MSA”).

Financial Advantages and Benefits

• The transaction is expected to be accretive to earnings in the first year and to enhance pro forma top line growth, gross margin and EBITDA and free cash flow generation;
• Primoris anticipates significant tax benefits arising from the transaction with an expected net present value of at least $80 million;
• Within 24 – 30 months after the close of the transaction, Primoris expects annual cost savings of at least $10 million from initiatives focused on: financial and IT systems, insurance programs savings and equipment spend optimization, among other factors.
• Pro forma for the transaction Primoris net leverage remains comfortably below 3.0x net debt to adjusted EBITDA for the last 12 months ended September 30, 2020.

Tom McCormick, President and Chief Executive Officer of Primoris, said, “This acquisition is fully aligned with our strategic and operational goals and represents a defining moment for Primoris. It moves us meaningfully into a market we have been targeting and does so in a way that establishes a new, robust platform while creating additional opportunities for our existing services.”

“Our employees are our greatest assets and we just added approximately 1,100 very valuable assets to Primoris. We want to welcome the Future Infrastructure employees to the Primoris family of companies and look forward to working with all of them to grow this Company into what we all believe it can be,” added McCormick. “Our visions and cultures are aligned. Both organizations are passionate about safety and dedicated to quality. Additionally, we look forward to working with Future Infrastructure’s customers and suppliers and building on the positive relationships that have been created over the years.”

Curt Dowd, Chief Executive Officer of Future Infrastructure, commented, “I cannot imagine a better home for Future Infrastructure. Similar to Primoris, Future Infrastructure has developed an industry-leading reputation built on superior quality, reliability and a commitment to safety.”

Don Riggs, Founder and Chief Operating Officer of Future Infrastructure, added, “Future brings to Primoris a well-established brand and a comprehensive suite of operational capabilities serving a large base of blue-chip customers in a growing market. We are pleased to become a Primoris company.”

Upon completion of the transaction, Primoris expects Future Infrastructure’s platform of Telecom and Utility end markets businesses to be integrated into Primoris’ Utilities and Distribution Segment and Primoris’ Transmission and Distribution Segment, furthering Primoris’ strategic plan for service line expansion, new market entry and growth in the Company’s MSA revenue base.

Transaction Approvals and Closing Conditions
The transaction has been unanimously approved by the Boards of Directors of both Primoris and Future Infrastructure and is expected to close in the first quarter of 2021, depending on the timing of regulatory approvals.

Financing
The acquisition will be funded using $120 million of cash on hand, a revolving advance of $100 million under our existing credit facilities and proceeds from a new $400 million term loan. CIBC and Bank of the West are serving as Joint Lead Arrangers for Primoris on the financing.

Advisors
Goldman Sachs & Co. LLC is serving as lead financial advisor to Primoris. UBS Investment Bank is also providing financial advice. Gibson, Dunn & Crutcher LLP is serving as the Company’s legal counsel. BofA Securities is serving as exclusive financial advisor to Future Infrastructure. Kirkland & Ellis LLP is serving as Future Infrastructure’s legal counsel.

About Primoris Services Corporation
Founded in 1960, Primoris, through various subsidiaries, has grown to become one of the leading providers of specialty contracting services operating mainly in the United States and Canada. Primoris provides a wide range of specialty construction services, fabrication, maintenance, replacement, and engineering services to a diversified base of customers. The Company’s national footprint extends from Florida, along the Gulf Coast, through California, into the Pacific Northwest and into Canada. Additional information on Primoris is available at www.prim.com.

About Future Infrastructure
Future Infrastructure, founded in 1999, is a provider of maintenance, repair, upgrade, and installation services to the telecommunications, regulated utility gas, pipeline, transportation, and civil infrastructure customers throughout the southern and western regions of the United States. Additional information on Future Infrastructure is available at www.future-infrastructure.com.

About Tower Arch

Headquartered in Salt Lake City, UT, Tower Arch Capital is a lower-middle market private equity fund. Tower Arch focuses on partnering with and growing high-quality family and entrepreneur-owned companies to deliver long-term value for their management teams and investors. Tower Arch brings operational, consulting, and financial expertise to small companies to give them the tools they need to achieve their full potential. Target investments include control positions in entrepreneur and family-owned businesses with revenue between $20 million and $150 million or EBITDA between $5 million and $25 million. Additional information on Tower Arch Capital is available at www.towerarch.com.