MasTec (NYSE:MTZ) said it has entered into a definitive agreement to acquire The Superior Group, an electrical infrastructure contractor focused on data centers and other mission-critical markets, in a transaction valued at approximately $1.65 billion upfront.
Chief Executive Officer Jose Mas said on the conference call that the acquisition expands MasTec’s position in infrastructure tied to artificial intelligence, cloud computing and digital infrastructure. He described Superior as “one of the premier electrical infrastructure contractors” serving hyperscalers, data center developers and mission-critical customers across the United States.
Deal Terms and Financing
Chief Financial Officer Paul DiMarco said the purchase price consists of $1.175 billion in cash and $475 million in MasTec common stock, along with a performance-based earn-out tied to Superior’s financial results over the three years after closing. MasTec expects to issue approximately 1.2 million shares as part of the equity consideration.
DiMarco said MasTec expects to fund the cash portion through cash on hand, borrowings under its existing credit facility and delayed-draw term loan facilities arranged for the transaction. The company expects the deal to close later this month after regulatory clearance.
The upfront consideration represents 6.9 times Superior’s expected 2026 EBITDA, DiMarco said. In response to an analyst question, Mas said MasTec expects the earn-out to add about one additional turn to the upfront multiple, depending on Superior’s performance. He added that the earn-out is uncapped and based on performance targets over three years.
Expected Financial Contribution
MasTec said it expects the acquisition to be immediately accretive to revenue, adjusted EBITDA, earnings per share and cash flow from operations.
For 2026, MasTec expects Superior to contribute approximately five months of earnings to consolidated results, including:
- $800 million to $900 million of revenue;
- $100 million to $150 million of adjusted EBITDA; and
- $0.50 to $0.65 of adjusted earnings per share.
For the full year 2026, Superior is projected to generate approximately $1.6 billion to $1.7 billion of revenue and $225 million to $250 million of adjusted EBITDA. Looking ahead to 2027, MasTec expects Superior to generate $2.2 billion to $2.5 billion of revenue and $250 million to $275 million of adjusted EBITDA.
DiMarco said the expectations are preliminary, reflect a conservative approach and do not include revenue synergies, cross-selling opportunities or operational benefits from combining the businesses. Superior will become a new operating group within MasTec, and its results are expected to be reflected in the Power Delivery segment.
Data Center and Power Infrastructure Focus
Mas said the transaction strengthens MasTec’s position in markets where power infrastructure, communications infrastructure and data center development are converging. He said MasTec already delivers critical infrastructure that brings power, communications and energy to data center campuses, while Superior adds capabilities “inside the campus” through electrical construction, integrated systems, prefabrication, commissioning support and maintenance services.
Mas said the combination gives MasTec a broader offering across the infrastructure value chain. He said customers increasingly want larger, integrated partners that can self-perform work, mobilize labor at scale and deliver complex projects with speed and reliability.
In response to a question from Citigroup analyst Andy Kaplowitz, Mas said MasTec has historically performed much of the work outside the building, while Superior performs work inside the building. He said the combination could allow MasTec to offer a more turnkey service to customers, including general contractors.
Superior’s Workforce and Growth Profile
Superior has approximately 3,000 employees. Mas said access to skilled labor is one of the most important competitive advantages in the industry and described Superior’s workforce as one of the company’s most attractive assets.
During the Q&A, Mas said Superior is currently an all-union business and characterized the transaction as “a bet on labor scarcity.” He said Superior’s workforce has grown almost 400% over the last few years and that the company has shown a strong ability to recruit, train and deploy skilled electrical labor.
Mas also said Superior has grown 100% organically, with no history of acquisitions contributing to its recent expansion. He said the business has operated primarily in three states in recent years, but has signed contracts that will expand it into five states next year, with the potential for additional state expansion after that.
Asked about Superior’s backlog, Mas said MasTec conducted project-by-project due diligence and has “enormous conviction” in its 2027 expectations. He said Superior has five large customers and a blue-chip customer base, adding that MasTec expects backlog to grow significantly through the balance of the year.
Balance Sheet Outlook
DiMarco said MasTec expects pro forma net leverage to be modestly above two times at closing, but expects net leverage to decline below two times by the end of 2026 due to the combined company’s expected earnings and cash flow generation.
He said the transaction should generate a low double-digit return on invested capital in the first year and support MasTec’s stated target of 16% in 2028. DiMarco also said MasTec remains committed to maintaining strong liquidity and preserving its investment-grade credit profile.
Mas said the company sees the data center build-out as still being in its early stages, based on conversations with customers, hyperscalers and advisors during due diligence. He acknowledged that the market may see “ups and downs,” but said MasTec remains bullish on the long-term opportunity.
About MasTec (NYSE:MTZ)
MasTec, Inc is a diversified infrastructure construction company that provides engineering, fabrication, installation and maintenance services across a broad range of end markets. Its principal activities encompass the development of communications networks, oil and gas pipeline systems, electrical transmission and distribution facilities, industrial installations and renewable energy projects.
The company traces its roots to a small cable installation operation in Miami and has grown through a series of strategic acquisitions to become one of the largest infrastructure contractors in North America.
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