Dallas-based specialty contractor Primoris Services Corp. is buying into growth in broadband internet and 5G deployments with a $620 million acquisition.
Primoris said Monday after trading markets closed that it is acquiring Mesquite-based Future Infrastructure Holdings from private equity firm Tower Arch Capital and other shareholders. Primoris shares closed Monday at $27.02 and were unchanged in after-hours trading.
Future Infrastructure reported revenue of $342 million and earnings of $66 million before taxes, depreciation and amortization for the 12-month period that ended Sept. 30. Its 1,100 employees maintain, repair and install infrastructure for the telecommunication, regulated gas utility and other industries.
The deal positions Primoris in “the large and growing telecommunication services market, which is benefiting from multiyear tailwinds due to significant fiber deployments to support last-mile broadband capacity, the Internet of Things, 5G technology and substantial growth in data consumption,” the company said.
Primoris CEO Tom McCormick described it as “a defining moment” for the 60-year-old company. He was scheduled to discuss the deal with investors Tuesday morning.
“It moves us meaningfully into a market we have been targeting and does so in a way that establishes a new, robust platform,” he said in a statement.
Primoris is a leader in required infrastructure services for the utility and energy industries, bringing in $3.1 billion in revenue last year and employing more than 12,000 workers. It moved its corporate headquarters to Dallas in 2011 from Lake Forest, Calif.
The company said it has been transitioning its business to master service agreements that provide recurring revenue. Those agreements accounted for 44% of the company’s revenue last year.
The Future Infrastructure transaction is expected to close early next year, pending regulatory approvals. Primoris said it expects to trim $10 million or more in annual operating costs within 24 to 30 months of closing by combining financial and IT systems, insurance programs and equipment spending.
“I cannot imagine a better home for Future Infrastructure,” CEO Curt Dowd said in a statement.