|[November 13, 2012]
Primoris Services Corporation to Acquire Q3 Contracting Inc.
DALLAS --(Business Wire)--
Primoris Services Corporation (NASDAQ Global Select: PRIM) ("Primoris"
or "Company") today announced that it has signed a definitive agreement
to acquire Q3 Contracting Inc. ("Q3"), with an expected closing date of
November 17th. Based in Little Canada, Minnesota, just north of St.
Paul, Q3 specializes in small diameter pipeline and gas distribution
For the year ended December 31, 2011, Q3 generated operating income of
$8.9 million on revenues of $84 million.
Total consideration consists of two parts: a $48.1 million cash payment
at closing and incentive provisions that are based on Q3 achieving the
following financial targets (using EBITDA as that term is defined in the
For the period November 18, 2012 through December 31, 2013, a cash
payment of $3.75 million if EBITDA is at least $17.7 million with an
additional cash payment of $1.25 million if EBITDA exceeds $19.7
For the calendar year 2014, a cash payment of $3.75 million if EBITDA
exceeds $19 million with an additional cash payment of $1.25 million
if EBITDA exceeds $22 million.
Brian Pratt, Primoris Chairman, President and CEO, commented, "The
acquisition of Q3 continues to broaden our national presence in pipeline
construction, replacement and integrity work. Driven by utility growth,
normal replacement cycles, environmental and safety regulations, we see
long term opportunities in these markets as well as those in our legacy
geographies. We are pleased to have Jay Osborn and his team of nearly
700 employees join Primoris in servicing these growing markets."
Q3 serves a variety of investor-owned utilities in Minnesota, Iowa,
Wisconsin, Missouri, South Dakota, North Dakota, Illinois, Nebraska,
Ohio and Colorado, with a smaller concentration of municipal customer.
Its primary lines of business include remediation and replacement of
existing gas distribution lines for local distribution companies and
pipeline-associated restoration work. This work is performed largely
under Master Service Agreements and is similar to that performed by
ARB's underground group in California.
Q3 will operate as part of Primoris's West Construction Services
segment. Current President Jay Osborn will continue to manage day to day
Additional information regarding the acquisition will be available in a
Form 8-K filing by Primoris on or about November 13, 2012. Further
details of the transaction, including pro forma financial information
and other data, will be included in a Form 8-K expected to be filed
prior to the end of January 2013. These filings will be available at
the Securities and Exchange Commission's web site, www.sec.gov,
and at the "Investor Relations" section of Primoris's web site at www.prim.com.
ABOUT Q3 CONTRACTING
Q3 Contracting is a privately owned and operated construction
contracting company that provides both specific and turnkey services for
its customers in the gas, oil, electric and telecommunications industry.
Its labor force is experienced and highly mobile. In total the company
workforce is nearly 700, with headquarters in Minnesota and branch
offices in Denver, Colorado, Milwaukee, Wisconsin and Des Moines, Iowa.
Founded in 1946, Primoris, through various subsidiaries, has grown to
become one of the largest construction service enterprises in the United
States. Serving diverse end markets, Primoris provides a wide range of
construction, fabrication, maintenance, replacement, water and
wastewater, and engineering services to major public utilities,
petrochemical companies, energy companies, municipalities, and other
customers. Since December 2009, Primoris has more than doubled its size
and the Company's national footprint now extends from Florida, along the
Gulf Coast, through California, into the Pacific Northwest and Canada.
For additional information, please visit www.prim.com.
FORWARD LOOKING STATEMENTS
This press release contains certain forward-looking statements,
including with regard to the Company's future performance. Words such as
"estimated," "believes," "expects," "projects," "may," and "future" or
similar expressions are intended to identify forward-looking statements.
Forward-looking statements inherently involve risks and uncertainties,
including without limitation, those detailed in the "Risk Factors"
section and other portions of our Annual Report on Form 10-K, our Form
10-Q, and other filings with the Securities and Exchange Commission.
Primoris does not undertake any obligation to publicly update or revise
any forward-looking statements, whether as a result of new information,
future events or otherwise, except as may be required under applicable
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