Dycom Strengthens Position With $1.63B Power Solutions Acquisition

Core Insights - Dycom Industries Inc. has completed the acquisition of Power Solutions, LLC for approximately $1.63 billion in cash and about 1.0 million shares of Dycom common stock, enhancing its position in the digital infrastructure market [1][9] - The acquisition is expected to be immediately accretive to adjusted EBITDA margins, adjusted diluted earnings per share (EPS), and free cash flow, while also diversifying services and expanding execution capacity [3][4] Company Overview - Power Solutions is a leading electrical contractor in the Mid-Atlantic region, particularly focused on data centers, with a projected 2025 revenue of about $1 billion and a four-year revenue CAGR of 15% [4][9] - The company has a strong financial profile, with EBITDA margins in the mid- to high teens and a backlog exceeding $1 billion [4] Strategic Growth - Dycom's acquisition strategy is a key pillar of its growth, complementing organic growth and expanding into new markets and product categories [5] - The company has a successful track record of integrating acquisitions, which preserves the culture and local leadership of acquired businesses while leveraging Dycom's operational strengths [6] Financial Performance - Dycom's stock has gained 27% over the past three months, significantly outperforming the Zacks Building Products - Heavy Construction industry's 6.9% rise [7] - The combined company is expected to reduce net leverage to around 2x within 12 to 18 months, indicating strong financial discipline [3] Market Outlook - The company remains optimistic about long-term growth prospects, driven by sustained demand for fiber infrastructure and robust activity from carrier partners [8]