Sep. 3, 2009 (PR Newswire) --

HOUSTON, Sept. 3 /PRNewswire-FirstCall/ -- Quanta Services, Inc. (NYSE: PWR) today announced that it has signed a definitive agreement to acquire privately held Price Gregory Services, Incorporated, a leading natural gas and oil transmission pipeline infrastructure service provider in North America, in a cash and stock transaction valued at approximately $350 million. Under the terms of the agreement, Quanta will issue approximately 11.1 million shares of Quanta common stock, valued at $250 million, and will pay approximately $100 million in cash, subject to adjustment, to the stockholders of Price Gregory.

Price Gregory is the leading energy infrastructure services provider of its kind, specializing in the construction of large diameter transmission pipelines. Building on Quanta's leadership role in the electric power transmission industry, the acquisition of Price Gregory strongly positions Quanta as a leader in the North American energy transmission infrastructure market and will enable the company to take advantage of the positive long-term outlook for the natural gas industry.

"The acquisition of Price Gregory is a strategic move that will significantly expand the scale and scope of Quanta's existing natural gas operations. We are confident that the additional resources, expertise and client relationships that Price Gregory brings will support our efforts to capture attractive opportunities in the natural gas pipeline infrastructure market, which is projected to grow significantly in the next decade and beyond," said John R. Colson, chairman and chief executive officer of Quanta. "Financially, this transaction is also very compelling. We expect it to result in substantial EPS accretion, increased revenues and strengthened margins, and to generate significant free cash flow to continue to fund our growth strategy.

"While demand for transmission pipeline construction has recently been impacted by the recession and low natural gas and oil prices, substantial growth is projected over the next decade as domestic natural gas plays a larger role in meeting this country's energy independence and clean energy goals. Significant recoverable gas reserves have been discovered in tight shale reservoirs throughout the country and new pipeline infrastructure is required to transport natural gas from these new sources to end markets. Currently, more than 50 major pipeline projects are approved or under construction in the U.S., with more on the horizon," he added.

"Natural gas is now the most abundant, cost effective and cleanest burning fossil fuel and will be a vital fuel for base load power necessary to offset intermittency of renewable generation. Our acquisition of Price Gregory, the leading company in the sector, positions Quanta to significantly expand its presence in this market at an opportune time," he concluded.

Prior to the global economic downturn, Price Gregory achieved revenues of more than $1.41 billion and earnings before interest, taxes, depreciation and amortization (EBITDA, a non-GAAP measure) of $258 million for the year ended Dec. 31, 2008. Price Gregory is expected to achieve revenues between $1.1 billion and $1.2 billion and EBITDA between $170 million and $190 million for the year ended Dec. 31, 2009 and revenues between $700 million and $900 million in 2010. The transaction is expected to be accretive to Quanta's earnings per share before amortization expenses by $0.13 to $0.21 in 2010. Beyond 2010, Price Gregory's revenues and operating income are expected to grow as a result of increasing demand for natural gas infrastructure.

John E. Jackson, president and CEO of Price Gregory, said, "With a strong track record for safety, customer service, quality performance, timely completion and overall commitment to excellence, Quanta is the ideal partner for Price Gregory as we look to build on our long history of success and to meet the growing needs of our customers in the years ahead. We are excited about becoming part of Quanta."

Price Gregory was formed on Jan.