Quanta Services, Inc. · NYSE:PWR
Quanta Services — Merger or Acquisition (July 2017)
18 slides from Quanta Services's merger presentation, Jul 21, 2017
Slide 1: Acquisition of Stronghold
Acquisition of Stronghold Investor Conference Call Presentation July 21, 2017
Slide 2: Forward Looking Statement Disclaimer
Forward Looking Statement Disclaimer This presentation (and oral statements regarding the subject matter of this presentation) includes forward-looking statements intended to qualify under the “safe harbor” from liability established by the Private Securities Litigation Reform Act of 1995. These for
Slide 3: Introduction & Agenda
Introduction & Agenda Conference Call Hosts Duke Austin – President & Chief Executive Officer Derrick Jensen – Chief Financial Officer Conference Call Agenda • Stronghold Companies Overview • Strategic Rationale • Acquisition Financial Overview • Industrial Services Industry Drivers • Strategic Impe
Slide 4: Stronghold Overview
Stronghold Overview Stronghold is a leading specialized services company providing high pressure and critical path solutions to the downstream and midstream energy markets • A private company formed in 2002 that initially focused on providing catalyst handling services and has since grown organicall
Slide 5: Strategic Rationale
Strategic Rationale • Facilitates capture of a greater portion of energy industry spend and offers cross-selling opportunities • Opportunity to expand Stronghold’s services to Quanta customers and vice versa • Ability to provide turnkey high voltage power and turnaround services – the two most criti
Slide 6: Extensive Service Area And Customer Relationships
Extensive Service Area And Customer Relationships Significant Gulf Coast Presence - region with majority of U.S. refinery and petrochemical production and facilities Stronghold Locations & Service Area High Quality and Diverse Customer Base = Service areas 6
Slide 7: Stronghold Service Offerings
Stronghold Service Offerings Stronghold is a leading specialized services company providing high pressure and critical path solutions to the downstream and midstream energy markets 2016 Revenue = Approx. $500 Million • Leading turnkey catalyst maintenance service provider to refining and petrochemic
Slide 8: Complementary Service Offerings
Complementary Service Offerings Midstream Downstream Mainline Midstream Gas Pipeline Storage Instrumentation Catalyst Turnaround Piping & Electric Pipe Gathering Facilities Distribution Integrity Facilities & Electrical Maintenance Services Civil Inspection Power Combined • Stronghold’s services: St
Slide 9: Acquisition Financial Overview
Acquisition Financial Overview Transaction Value • Upfront consideration of $450 million • Approximately $360 million in cash and 2.7 million shares of PWR common stock valued at approximately $90 million • Cumulative three-year EBITDA based cash and stock earnout with maximum additional considerati
Slide 10: Industrial Services Industry Drivers
Industrial Services Industry Drivers Strong growth outlook for end markets served by the industrial services industry is supported by multiple, attractive market dynamics • Domestic oil, natural gas and NGL production has increased significantly due to the shale revolution Crude Oil, Natural • Downs
Slide 11: North America is the Largest Downstream Maintenance Market
North America is the Largest Downstream Maintenance Market Projected Global Downstream Maintenance U.S. Gulf Coast Region Is Largest Spending 2017 – 2021: ~ $336 Billion Downstream Market in North America & Is Strategically Advantaged North America Rest of 34% • Proximity to robust supply of shale a
Slide 12: Growing Shale Production & Attractive Input Prices
Growing Shale Production & Attractive Input Prices The abundant supply of domestic oil, natural gas and NGLs, coupled with cost and other advantages, is expected to drive continued investment in refining and petrochemical facilities U.S. Crude Oil Production U.S. Dry Gas Production U.S. NGLs & Other
Slide 13: Refinery Services Drivers
Refinery Services Drivers Positive outlook for the refining sector driven by expanding capacity, increasing utilization rates, aging infrastructure and a structural cost advantage KEY INDUSTRY TAILWINDS U.S. REFINERY COUNT & CAPACITY U.S. AVERAGE REFINERY UTILIZATION U.S. REFINERY MARGIN ADVANTAGE (
Slide 14: Consistent and Growing Spending in Key End Markets
Consistent and Growing Spending in Key End Markets The abundant supply of domestic hydrocarbons, structural competitive advantages, high utilization rates and other factors are expected to drive continued investment • Substantial installed base of industrial facilities operating in a highly corrosiv
Slide 15: Stronghold Strategic Imperatives Alignment
Stronghold Strategic Imperatives Alignment • Focus On Safety Excellence – Stronghold’s world class safety performance is a major differentiator • Maintain High Performance Culture – Stronghold’s culture drives job performance, safety excellence, a commitment to training, “A” level client service, a
Slide 16: Summary
Summary • Stronghold aligns with Quanta’s strategic imperatives for long-term growth • Specialized Industrial Services market is a natural service line expansion for Quanta to meet our customers’ needs • We believe downstream end market drivers and growth opportunities are attractive and should crea
Slide 17: Forward Looking Statement Disclaimer
Forward Looking Statement Disclaimer This presentation (and oral statements regarding the subject matter of this presentation) includes “forward-looking statements” intended to qualify for the "safe harbor" from liability established by the Private Securities Litigation Reform Act of 1995. These sta
Slide 18: Forward Looking Statement Disclaimer
Forward Looking Statement Disclaimer • Loss of customers with whom we or Stronghold have long-standing or significant relationships; • Our ability to generate internal growth; • Competition in our business, including our ability to effectively compete for new projects and market share; • The effect