Under the agreement, stockholders of InfrastruX will receive cash of $360m and 7.9 million in new Willbros shares, amounting to approximately 19.9% of outstanding Willbros shares or $120m, based on the Willbros 10-day average closing stock price as of March 10, 2010.
In addition, InfrastruX stockholders will be eligible for contingent earn-out payments of up to $125m in the aggregate. Those earn-out payments begin as EBITDA for the InfrastruX business exceeds $69.8m in 2010 and $80m in 2011.
Randy Harl, president and CEO of Willbros, said: “This exciting opportunity gives Willbros a leadership position in the fast-growing markets for electricity transmission and distribution services. It advances our strategy to diversify our exposure from solely the hydrocarbon value chain to fast-growing markets that draw on our core competencies in project management, engineering, construction and maintenance.
“It also adds to our scale at a time customers are seeking partners with greater financial strength, broader operational capabilities and wider geographic footprints.”
InfrastruX will operate as a separate segment of Willbros. This will reduce the integration risk and keep intact the InfrastruX management team, which has agreed to continue in the new electric transmission and distribution segment, Willbros said.
Willbros will finance the transaction with a combination of new common stock and cash. The cash consideration will be provided from existing cash on the Willbros balance sheet and new committed financing from a syndicate of banks. The new financing will consist of a three year $175m revolving credit facility and a four year $300m term loan.
The transaction is expected to close in the second quarter of 2010, subject to regulatory approvals and customary closing conditions.
