Quanta Services to Acquire Price Gregory

Quanta Services, Inc. announced that it has signed a definitive agreement to acquire privately held Price Gregory Services, Inc., a 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 a energy infrastructure services provider, 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 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.

Price Gregory was formed on Jan. 31, 2008 through the combination of H.C. Price Company and Gregory & Cook Construction, Inc. With roots dating back to the 1920s, the companies have played a significant role in the build out of the transmission pipeline infrastructure across the U.S.

The 2008 historical financial information presented for Price Gregory represents results for the eleven months ended Dec. 31, 2008 of Price Gregory combined with the results for the one month ended Jan. 31, 2008 of both H.C. Price Company and Gregory & Cook Construction, Inc.

The transaction, which is subject to customary closing conditions and regulatory approvals, is expected to close in the fourth quarter of 2009.

J.P. Morgan Securities, Inc. is acting as exclusive financial advisor to Quanta Services on this transaction.

Quanta Services is a specialized contracting services company, delivering infrastructure network solutions for the electric power, natural gas, telecommunications and cable television industries.

Price Gregory is a privately-held transmission pipeline contractor based in Houston.

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