U.S. infrastructure builder MasTec has agreed to acquire renewable energy specialist industry player infrastructure and energy alternatives company IEA in a cash and stock deal valued at $1.1 billion, including net debt.
Founded in 2011, the International Energy Agency provides engineering, procurement, construction and other related services to infrastructure project developers. To date, the company has completed more than 260 utility-scale wind and solar projects in North America. In March 2022, Silicon Ranch Corporation awarded a contract with the IEA to build a 70-megawatt solar farm in Early County, Georgia.
The acquisition of IEA will expand MasTec's own clean energy and infrastructure segment with incremental service capabilities and union-based clean power generation services, as well as expand its clean energy maintenance offerings and strengthen its non-union workforce and equipment resource capabilities.
The terms of the deal call for IEA shareholders to receive $14.00 per share in cash and MasTec stock, a 34% premium to IEA's closing price on July 22, 2022. The deal, which is awaiting approval from IEA shareholders and regulators, is expected to close in the last quarter of the year. Various IEA shareholders have committed to voting their combined 35% interest in support of the proposed acquisition.
While MasTec plans to rely on other debt financing options to finance the cash portion of the deal, it has secured committed bridge financing from Bank of America and JPMorgan, if needed, the company said.
MasTec also expects near-term post-transaction annual cost savings of approximately $10 million, primarily from reductions in IEA public company reporting and other costs. Taking into account both transaction financing costs and synergies, the IEA's adjusted net profit in 2023 is $45 million to $50 million.
