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OFFON

QUANTA SERVICES, INC.

(PWR)
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QUANTA SERVICES, INC. : Entry into a Material Definitive Agreement, Termination of a Material Definitive Agreement, Completion of Acquisition or Disposition of Assets, Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant, Unregistered Sale of Equity Securities, Regulation FD Disclosure, Financial Statements and Exhibits (form 8-K)

10/15/2021 | 05:05pm EST

Item 1.01 Entry into a Material Definitive Agreement.

On October 8, 2021, Quanta Services, Inc. (the "Company") entered into the Ninth Amendment to Fourth Amended and Restated Credit Agreement (the "Amendment"), among the Company and certain of the Company's subsidiaries, as Borrowers, the Company, as Guarantor, the lenders party thereto, Bank of America, N.A., as Administrative Agent, and the Swing Line Lenders and L/C Issuers party thereto. The Amendment amended the Fourth Amended and Restated Credit Agreement, dated as of December 18, 2015 (as amended, including by the Eighth Amendment to Fourth Amended and Restated Credit Agreement, dated as of September 9, 2021, and the Amendment, the "Amended Credit Agreement").

The Amendment, among other things, (i) provided for a new delayed draw term loan facility with total term loan commitments of $750.0 million for the purpose of financing, in whole or in part, the acquisition of Blattner (as defined below) pursuant to the Merger Agreement (as defined below), refinancing certain existing indebtedness of Blattner and paying certain related costs and expenses (the "Delayed Draw Term Loan Facility"), (ii) increased the aggregate revolving commitments of the lenders from $2.510 billion to $2.640 billion and (iii) extended the maturity date for the revolving commitments under the Amended Credit Agreement from September 22, 2025 to October 8, 2026 (the "Maturity Date"). The Delayed Draw Term Loan Facility also matures on the Maturity Date. The Amendment also increased the threshold amount for cross-defaults to certain debt instruments and for certain other purposes from $150.0 million to $300.0 million. After giving effect to the Amendment, the aggregate amount of the credit facilities provided for under the Amended Credit Agreement is $3.390 billion.

On October 13, 2021, the Company borrowed the full amount of the Delayed Draw Term Loan Facility and $50.9 million in revolving loans under the Amended Credit Agreement and used all of such proceeds to partially finance the cash portion of the consideration for the acquisition of Blattner pursuant to the Merger Agreement.

Pursuant to the Amendment, amounts borrowed under the Delayed Draw Term Loan Facility will bear interest, at the Company's option, at a rate equal to either (a) the LIBOR Rate (as defined in the Amended Credit Agreement) plus 1.000% to 1.625%, or (b) the Base Rate (as defined below) plus 0.000% to 0.625%, each determined based on either the Company's Consolidated Leverage Ratio (as described below) or the Company's Debt Rating (as defined in the Amended Credit Agreement), whichever is more favorable to the Company. The Consolidated Leverage Ratio is the ratio of the Company's total funded debt to Consolidated EBITDA (as defined in the Amended Credit Agreement). For purposes of calculating the Consolidated Leverage Ratio, total funded debt is reduced by available cash and Cash Equivalents (as defined in the Amended Credit Agreement) in excess of $25.0 million. The Base Rate equals the highest of (i) the Federal Funds Rate (as defined in the Amended Credit Agreement) plus 1/2 of 1%, (ii) Bank of America's prime rate and (iii) the LIBOR Rate plus 1.00%.

The Company is required to make quarterly payments on the first business day of each January, April, July and October, beginning in January 2023, on outstanding borrowings under the Delayed Draw Term Loan Facility in an amount equal to approximately $4.7 million per quarter in 2023 and 2024, approximately $9.4 million per quarter in 2025 and approximately $18.8 million per quarter in 2026. The aggregate principal amount of all such term loans outstanding on the Maturity Date must be paid on such date. The Company may voluntarily prepay borrowings under the Delayed Draw Term Loan Facility from time to time, in whole or in part, without premium or penalty.

Pursuant to the Amendment, amounts borrowed in U.S. dollars under the revolving credit facility will bear interest, at the Company's option, at a rate equal to either (a) the LIBOR Rate plus 1.125% to 1.750%, as determined based on either the Company's Consolidated Leverage Ratio or the Company's Debt Rating, . . .

Item 1.02 Termination of a Material Definitive Agreement.

As previously disclosed, on September 1, 2021, in connection with the execution of the Merger Agreement, the Company entered into a commitment letter (the "Commitment Letter") with Bank of America, N.A., BofA Securities, Inc., Wells Fargo Bank, National Association and Wells Fargo Securities, LLC (collectively, the "Commitment Parties"), pursuant to which, subject to the terms and conditions set forth therein, two of the Commitment Parties committed to provide a 364-day senior unsecured bridge facility in an aggregate principal amount of up to $2.1835 billion to finance the cash consideration estimated to be due at closing of the Merger (as defined below) and to pay fees and expenses incurred in connection therewith, should the Company choose to utilize it.

On September 23, 2021, in accordance with the terms of the Commitment Letter, the aggregate commitments under the Commitment Letter were reduced to approximately $696.1 million concurrently with the Company's issuance on such date (as previously disclosed) of $500,000,000 aggregate principal amount of its 0.950% Senior Notes due 2024, $500,000,000 aggregate principal amount of its 2.350% Senior Notes due 2032 and $500,000,000 aggregate principal amount of its 3.050% Senior Notes due 2041 (collectively, the "Notes"). Concurrently with the Company's entry into the Amendment, the remaining aggregate commitments under the Commitment Letter were reduced to zero and terminated.

The foregoing description of the Commitment Letter and the transactions contemplated thereby does not purport to be complete and is subject to, and qualified in its entirety by reference to, the full text of the Commitment Letter, a copy of which is filed as Exhibit 10.3 to this Current Report on Form 8-K and is incorporated herein by reference.

Item 2.01 Completion of Acquisition or Disposition of Assets.

On October 13, 2021 (the "Closing Date"), the Company completed the previously announced acquisition of Blattner Holding Company ("Blattner"). Pursuant to the terms and conditions of the Agreement and Plan of Merger (the "Merger Agreement") by and among the Company, Quanta Merger Sub, LLC, a Delaware limited liability company and wholly owned subsidiary of the Company ("Merger Sub"), Blattner, David Henry Company, a Minnesota corporation and wholly owned subsidiary of Blattner ("New Holdco"), and, solely for certain sections specified in the Merger Agreement, the Designated Company Shareholders (as defined in the Merger Agreement), Merger Sub merged with and into Blattner (the "Merger"), with Blattner surviving the Merger as a wholly owned subsidiary of the Company.

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Pursuant to the terms of the Merger Agreement, as a result of the Merger and except as otherwise provided in the Merger Agreement, (i) all equity interests of Blattner outstanding in the name of Blattner's equityholders (which did not include any shares of New Holdco common stock) immediately prior to the effective time of the Merger were cancelled and converted into the right to receive payment of the Merger Consideration (as defined in the Merger Agreement), which included a combination of cash and shares of common stock of the Company as described further below in this Item 2.01, and (ii) each outstanding award under the long term incentive plan of Blattner became fully vested and was cancelled in exchange for an amount as set forth in the Merger Agreement.

The Estimated Merger Consideration (as defined in the Merger Agreement) was $2.7 billion, subject to certain adjustments pursuant to the terms to the Merger Agreement, a portion of which included the issuance of 3,326,955 shares of common stock of the Company valued at $337.5 million to Blattner's equityholders and the remainder of which was paid or payable in cash. The cash portion of the consideration was funded through a combination of the Delayed Draw Term Loan Facility and revolving loans borrowed under the Amended Credit Agreement, as described in Item 1.01 of this Current Report on Form 8-K, as well as the net proceeds received in connection with issuance of the Notes described in Item 1.02 of this Current Report on Form 8-K. Additionally, pursuant to the terms of the Merger Agreement, the former owners of Blattner will be eligible for additional consideration of up to $300 million to the extent certain financial performance targets are achieved by the acquired business during a designated post-acquisition period.

The foregoing description of the Merger Agreement does not purport to be complete and is subject to, and qualified in its entirety by reference to the full text of the Merger Agreement. A copy of the Merger Agreement is filed as Exhibit 2.1 to this Current Report on Form 8-K and is incorporated herein by reference.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an

Off-Balance Sheet Arrangement of a Registrant.

The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated by reference herein in its entirety.

Item 3.02 Unregistered Sales of Equity Securities.

The information set forth under Item 2.01 of this Current Report on Form 8-K is incorporated herein by reference. Additionally, on October 1, 2021, the Company completed the acquisition of a business located in the United States that provides electric power construction and related services, in which a portion of the consideration consisted of the unregistered issuance of shares of common stock of the Company. The Company paid an approximate aggregate purchase price of approximately $55 million for that acquisition, consisting of cash, repayment of debt, assumption of certain liabilities and the issuance of 42,748 shares of common stock of the Company valued at approximately $5.0 million as of the date of the acquisition.

The issuance of shares of common stock of the Company in connection with the Merger and the issuance of shares of common stock of the Company in connection with the acquisition completed on October 1, 2021 were not registered under the Securities Act in reliance upon the exemption from registration provided by Section 4(a)(2) of the Securities Act, which exempts transactions by an issuer not involving any public offering, and Rule 506 of Regulation D promulgated by the Securities and Exchange Commission (the "SEC") under that section. These securities may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirement.

Item 7.01 Regulation FD Disclosure.

On October 14, 2021, the Company issued a press release announcing the Closing of the acquisition of Blattner, a copy of which is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The information furnished in Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, and shall not be incorporated by reference in any filing under the Securities Act, except as expressly set forth by specific reference in such a filing.

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Item 9.01 Financial Statements and Exhibits.

(a) Financial Statements of Business Acquired.

Financial statements of Blattner are not included in this Current Report on Form 8-K. Such financial statements will be filed within 71 calendar days after the date of filing of this Current Report on Form 8-K.

(b) Pro Forma Financial Information.

Pro forma financial information relative to the acquired business is not included in this Current Report on Form 8-K. Such pro forma financial information will be filed within 71 calendar days after the date of filing of this Current Report on Form 8-K.

(d) Exhibits.



Exhibit Number                                  Description

2.1*                     Agreement and Plan of Merger, dated as of September 1,
                       2021, by and among Quanta Services, Inc., Quanta Merger Sub,
                       LLC, Blattner Holding Company, David Henry Company and,
                       solely for certain sections specified in the Merger
                       Agreement, the Designated Company Shareholders

10.1                     Eighth Amendment to Fourth Amended and Restated Credit
                       Agreement, dated as of September 9, 2021, among Quanta
                       Services, Inc. and certain subsidiaries of Quanta Services,
                       Inc., as Borrowers, Quanta Services, Inc., as Guarantor, the
                       lenders party thereto, Bank of America, N.A., as
                       Administrative Agent, and the Swing Line Lenders and L/C
                       Issuers party thereto

10.2                     Ninth Amendment to Fourth Amended and Restated Credit
                       Agreement, dated as of October 8, 2021, among Quanta
                       Services, Inc. and certain subsidiaries of Quanta Services,
                       Inc., as Borrowers, Quanta Services, Inc., as Guarantor, the
                       lenders party thereto, Bank of America, N.A., as
                       Administrative Agent, and the Swing Line Lenders and L/C
                       Issuers party thereto

10.3                     Commitment Letter, dated as of September 1, 2021, by and
                       among BofA Securities, Inc. Bank of America, N.A., Wells
                       Fargo Securities, LLC, and Wells Fargo Bank, National
                       Association, as the commitment parties, and Quanta Services,
                       Inc., as borrower

99.1                     Press Release of Quanta Services, Inc. dated October 14,
                       2021

104                    Cover Page Interactive Data File (the cover page XBRL tags
                       are embedded within the Inline XBRL document).



* The exhibits and schedules to the Merger Agreement have been omitted from this

filing pursuant to Item 601(b)(2) of Regulation S-K. The Company agrees to

furnish copies of any of such exhibits or schedules to the SEC upon request;

provided, however, that the Company may request confidential treatment pursuant

to Rule 24b-2 of the Securities Exchange Act of 1934, as amended, for any

schedules so furnished.

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