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Acquisitions
 3 Months Ended
Mar. 31, 2025
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]  
Acquisitions
5. ACQUISITIONS:
During the three months ended March 31, 2025, Quanta acquired a business located in the United States that specializes in civil solutions, including site clearing, earthwork, soil stabilization and infrastructure development (which will be primarily included in the Underground and Infrastructure segment) and a business located in Australia that specializes in electrical engineering and the design and manufacturing of industrial technology solutions (which will be included in both the Electric and Underground and Infrastructure segments). The consideration for these transactions consisted of approximately $389.4 million paid or payable in cash on the dates of the acquisitions and 515,822 shares of Quanta common stock, which had a fair value of $161.6 million as of the respective acquisition dates. The final amount of consideration for these acquisitions remains subject to certain post-closing adjustments, including with respect to net working capital, tax estimates and other contractually agreed-upon adjustments to consideration. Additionally, pursuant to the terms of the agreements, the former owners of these businesses are eligible to receive potential payments of contingent consideration of up to approximately $109.4 million to the extent the acquired businesses achieve certain financial and operating performance targets over a three-year period. As of the
dates of the respective acquisitions, the fair value of the contingent consideration liabilities related to certain of these acquisitions was $38.3 million.
On July 17, 2024, Quanta completed the acquisition of Cupertino Electric, Inc. (CEI), which provides electrical infrastructure solutions, including engineering, procurement, project management, construction and modularization services, to the technology, renewable energy and infrastructure and commercial industries. CEI is located in the United States, and its results have been included in the Electric segment since the acquisition date. The aggregate consideration for the acquisition was approximately $2.04 billion, which included approximately $1.65 billion paid in cash, including payment for cash held by CEI as of the acquisition date, and 882,926 shares of Quanta common stock, which had a fair value of $216.3 million as of the acquisition date. The cash consideration paid by Quanta, net of cash received from CEI, was $1.24 billion. Additionally, the former equity holders and award holders of CEI are eligible for a potential contingent consideration payment of up to $200.0 million based on achievement of certain financial performance targets during the three-year post-acquisition period beginning in January 2025. To the extent payable, Quanta, at its sole discretion, can pay up to 10% of any such contingent consideration amount in Quanta common stock. As of the acquisition date, the fair value of the contingent consideration liability was $164.0 million.
During the year ended December 31, 2024, Quanta also acquired seven additional businesses located in the United States, including: a business that provides specialty environmental solutions to utility, industrial and petrochemical companies (primarily included in the Underground and Infrastructure segment); a business that specializes in testing, manufacturing and distributing safety equipment and supplies (primarily included in the Electric segment); a business that specializes in electrical infrastructure services for substations, data centers and governmental entities (primarily included in the Electric segment); a business that manufactures transmission and distribution equipment for the electric utility industry (primarily included in the Electric segment); a business that provides services and equipment related to aerial telecommunications infrastructure and networks (primarily included in the Electric segment); a business that provides services related to fiber optic networks (primarily included in the Electric segment); and a business that specializes in designing, manufacturing, and distributing liquid-filled power transformers primarily for electrical companies and utilities (primarily included in the Electric segment). The consideration for these businesses consisted of approximately $540.9 million paid or payable in cash and 334,472 shares of Quanta common stock, which had a fair value of $74.8 million as of the acquisition dates. The final amount of consideration for certain of these acquisitions remains subject to certain post-closing adjustments, including with respect to net working capital. As of the dates of the respective acquisitions, the fair value of the contingent consideration liabilities related to certain of these acquisitions was $24.3 million.
The results of operations of acquired businesses have been included in Quanta’s consolidated financial statements since their respective acquisition dates. Additionally, the former owners of certain acquired businesses are eligible to receive potential payments of contingent consideration to the extent the acquired businesses achieve certain financial performance targets over specified post-acquisition periods.
Purchase Price Allocation
Quanta is finalizing its purchase price allocations related to certain businesses acquired subsequent to March 31, 2024, and further adjustments to the purchase price allocations may occur, with possible updates primarily related to intangible asset values, property and equipment values, certain contingent liabilities, tax estimates, and the finalization of closing working capital adjustments and other contractually agreed-upon adjustments to consideration. The aggregate consideration paid or payable for businesses acquired between March 31, 2024 and March 31, 2025 was allocated to acquired assets and assumed liabilities, which resulted in an allocation of $576.1 million to net tangible assets, $935.6 million to identifiable intangible assets and $1.29 billion to goodwill.
The following table summarizes the estimated fair value of total consideration transferred or estimated to be transferred and the fair value of assets acquired and liabilities assumed as of their respective acquisition dates as of March 31, 2025 for
acquisitions completed in the three months ended March 31, 2025 (in thousands):
March 31, 2025
Consideration:
Cash paid or payable$389,373 
Value of Quanta common stock issued161,554 
Contingent consideration38,342 
Fair value of total consideration transferred or estimated to be transferred$589,269 
Cash and cash equivalents$13,165 
Accounts receivable96,844 
Contract assets2,120 
Prepaid expenses and other current assets6,746 
Property and equipment70,069 
Other assets1,584 
Other intangible assets
207,389 
Accounts payable and accrued expenses
(43,867)
Contract liabilities(6,451)
Other non-current liabilities
(997)
Deferred income taxes(1,162)
Total identifiable net assets345,440 
Goodwill 243,829 
Fair value of net assets acquired$589,269 
Goodwill represents the amount by which the purchase price for an acquired business exceeds the net fair value of the assets acquired and liabilities assumed. The acquisitions completed during the three months ended March 31, 2025 contributed to the recognition of goodwill by strategically expanding Quanta’s U.S. underground utility and infrastructure solutions business and its Australian underground utility and infrastructure and electric infrastructure solutions businesses. As of March 31, 2025, approximately $226.4 million of goodwill is expected to be deductible for income tax purposes related to acquisitions completed in the three months ended March 31, 2025.
Quanta’s intangible assets subject to amortization include customer relationships, backlog, trade names, non-compete agreements, and patented rights and other. The following table summarizes the estimated fair values of identifiable intangible assets for the acquisitions completed in the three months ended March 31, 2025 as of the acquisition dates and the related weighted average amortization periods by type (in thousands, except for weighted average amortization periods, which are in years).    
Three Months Ended March 31, 2025
Estimated Fair ValueWeighted Average Amortization Period in Years
Customer relationships$180,999 6.0
Backlog6,885 1.5
Trade names19,226 15.0
Non-compete agreements279 5.0
Total intangible assets subject to amortization$207,389 6.7
The level of inputs used for these identifiable intangible asset fair value measurements is Level 3.
The significant assumptions used by management in determining the fair values of customer relationships intangible assets include future revenues, margins, discount rates and customer attrition rates. The following table includes the discount
rates and customer attrition rates used to determine the fair value of customer relationships intangible assets for businesses acquired during the three months ended March 31, 2025 as of the respective acquisition dates:
Three Months Ended
 March 31, 2025
RangeWeighted Average
Discount rates
18% to 20%
20%
Customer attrition rates
15% to 30%
15%
Contingent Consideration
As described above, certain business acquisitions have contingent consideration liabilities associated with the transactions. The aggregate fair value of outstanding contingent consideration liabilities for acquisitions completed prior to March 31, 2025 and their classification in the accompanying condensed consolidated balance sheets is as follows (in thousands):
 March 31, 2025December 31, 2024
Accounts payable and accrued expenses$151,255 $152,030 
Insurance and other non-current liabilities236,336 192,954 
Total contingent consideration liabilities$387,591 $344,984 
The estimated fair values of these contingent consideration liabilities are measured on a recurring basis using a probability-weighted discounted cash flow method, which considers significant inputs not observable in the market and are Level 3 inputs.
Quanta’s aggregate contingent consideration liabilities can change due to additional business acquisitions, settlement of outstanding liabilities, accretion in present value, changes in estimated fair value, the performance of acquired businesses in post-acquisition periods, the incremental impact on Quanta’s performance attributable to an acquired business and in certain cases, management discretion. These changes are reflected in “Change in fair value of contingent consideration liabilities” in the accompanying condensed consolidated statements of operations.
All of Quanta’s outstanding contingent consideration liabilities are subject to a maximum payment amount, and the aggregate maximum payment amount of these liabilities for acquisitions completed prior to March 31, 2025 totaled $689.6 million as of March 31, 2025. During the three months ended March 31, 2025 and 2024, Quanta made no cash payments to settle contingent consideration liabilities.
Pro Forma Results of Operations
The following unaudited supplemental pro forma results of operations for Quanta, which incorporate the acquisitions completed in the three months ended March 31, 2025 and the year ended December 31, 2024, have been provided for illustrative purposes only and may not be indicative of the actual results that would have been achieved by the combined companies for the periods presented or that may be achieved by the combined companies in the future (in thousands).
Three Months Ended
March 31,
20252024
Revenues$6,234,238 $5,676,986 
Net income attributable to common stock
$144,245 $107,871 
The pro forma combined results of operations for the three months ended March 31, 2025 and 2024 were prepared by adjusting the historical results of Quanta to include the historical results of the businesses acquired in 2025 as if such acquisitions had occurred January 1, 2024. The pro forma combined results of operations for the three months ended March 31, 2024 were prepared by further adjusting the historical results of Quanta to include the historical results of the business acquired in 2024 as if such acquisition had occurred January 1, 2023. These pro forma combined historical results were adjusted for the following: a reduction of interest and other financing expenses as a result of the repayment of outstanding indebtedness of the acquired businesses; an increase in interest and other financing expenses as a result of the debt incurred by Quanta for the purpose of financing the acquisition of CEI and cash consideration paid for all acquired businesses; an increase in amortization
expense due to the intangible assets recorded; elimination of inter-company sales; and changes in depreciation expense to adjust acquired property and equipment to the acquisition date fair value and to conform with Quanta’s accounting policies. The pro forma combined results of operations do not include any adjustments to eliminate the impact of acquisition-related costs incurred by Quanta or acquired businesses or any cost savings or other synergies that resulted or may result from the acquisitions.
Impact on Consolidated Results of Operations Related to Acquisitions
Included in Quanta’s condensed consolidated results of operations for the three months ended March 31, 2025 were revenues of $96.9 million and income before income taxes of $3.5 million, which included $7.9 million of amortization expense related to the acquisitions completed in the three months ended March 31, 2025. Included in Quanta’s condensed consolidated results of operations for the three months ended March 31, 2024 were revenues of $67.7 million and a loss before income taxes of $3.2 million, which included $4.8 million of amortization expense related to the acquisitions completed in 2024.