Precision Pipeline, LLC
Eau Claire, Wisconsin
has been acquired by
Capital Alliance Corporation initiated
this transaction and assisted in its closing.
Precision Pipeline, LLC
The Selling Company: Precision Pipeline, LLC is a leader among the construction contractors that build large-diameter transcontinental oil and natural gas pipelines in the United States. Formed by pipeline construction industry veterans, the company grew into a $500 million enterprise in just four years. Precision employs a workforce of 1500 that specializes in operating in demanding terrain and difficult weather conditions. The company’s technical capabilities and reputation for meeting schedule and budget requirements on the toughest pipeline projects have contributed to its rapid and profitable growth. U.S. energy policy and trends support a bullish future for the company, as shale gas production and a reliance on natural gas for electrical generation increase. The company’s backlog is $500 million.
Why the Company Was Sold: The selling shareholders elected to reduce the risk in their investment in Precision at a time when the company had become highly attractive to potential acquirers. A major benefit of the sale is improved future growth opportunities as a division of a public company, which will result in additional value for the shareholders under a five-year earnout program.
Capital Alliance’s Performance: Capital Alliance screened an extensive group of specialty construction industry acquirers to identify buyers for Precision. MasTec, Inc. emerged as the best-fit acquirer, based primarily on the complementary strategic goals of buyer and seller. Capital Alliance’s superior marketing skills and leadership through complex negotiations led to an enhanced transaction valuation which exceeded the expectations of the selling shareholders.
Terms of the Transaction: The transaction included a payment of $132 million in cash at the closing and the assumption of $34 million in debt, which, together, represented more than twice the initial offer. Including earnout consideration, the aggregate transaction value is expected to exceed $250 million.
The Acquiring Company: MasTec, Inc. is a leading specialty contractor for communications companies, utilities and governments throughout the United States. As a publicly-traded, billion dollar market capitalization company, MasTec designs, builds, installs, maintains and upgrades infrastructure that is the backbone of the nation’s economy, including telephone, high-speed internet, electric, water, sewer and natural gas, as well as providing installation and maintenance services for satellite and cable television companies.