Primoris Services to Acquire Utility-Focused Contractor PLH Group in USD 470m Cash Deal.

MANews-(C)2009-2022

US-based specialty contractor Primoris Services Corp. (NASDAQ Global Select: PRIM) has entered into a definitive merger agreement to acquire PLH Group, Inc. in an all-cash transaction valued at USD 470m, the company said.

Primoris, a specialty contractor in the US, provides critical infrastructure services to the utility, renewables and other related energy markets.

The company's strategic focus on utility markets includes Power Delivery, Communications, and Gas Utilities.

PLH Group is a utility-focused specialty construction company with concentration in key fast-growing regions of the US Both companies are headquartered in the Dallas-Fort Worth metroplex.

The deal nearly doubles Power Delivery business and increases the company's Utilities segment to over 50% of pro forma revenue.

Primoris said it expects annual cost savings of at least USD 10m from cost initiatives within 24 months after the close of the transaction

Pro forma for the transaction Primoris net leverage of approximately 3.3x net debt to adjusted EBITDA for the last 12 months with targeted de-levering to 2.0x by 2024

For the 12 months ended May 31, 2022, PLH generated total revenue of USD 733m and total adjusted earnings before income tax, depreciation and amortization of USD 54m.

Approximately 80% of PLH revenue is associated with Power Delivery and Gas Utility end markets for the 12 months ended December 31, 2021.

With a high proportion of PLH revenue based on master service agreements and unit price contracts, the transaction also maintains Primoris' strategic emphasis on limiting contract risk.

On a pro forma basis, MSA contracts will increase from 46% of total revenue to 48% of total revenue.

The transaction has been unanimously approved by the boards of directors of both Primoris and PLH Group and is expected to close in...

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