Quanta Services (PWR) Closes Banister Pipelines Buy - Analyst Blog

Quanta Services Inc. (PWR) recently announced the completion of the acquisition of leading Canada-based mainline pipeline construction and maintenance services contractor Banister Pipelines Corp. The financial details of the acquisition have not been disclosed.

The Banister Pipelines takeover is a strategic fit as it broadens Quanta Services' Canadian mainline pipeline services offerings across Canada. This apart, Banister's customer base will be able to access Quanta Services' extensive energy infrastructure resources. The combined entity is expected to generate revenues to the tune of $350 million in full-year 2015.

This acquisition comes at an opportune time as Quanta Services expects unmatched levels of investment in pipeline and related infrastructure in Canada over the next several years. This in turn will be driven by the development of the Canadian oil sands and unconventional shale formations.

Quanta Services is one of the largest full-service providers of oil and gas infrastructure services in North America and is well placed to seize opportunities, driven by the development and production of resources from unconventional shale developments and the Canadian oil sands along with the coal seam gas in Australia. Since 2013, the company has been benefiting from projects related to unconventional shale developments in certain regions of North America.

Currently, the development activity for gathering system infrastructure in liquid-rich shale is strong, and there are indications that demand for its transmission pipeline services are likely to increase significantly going ahead. Quanta Services expects significant demand for pipeline construction to connect shale fields with refineries and other centers across the country primarily in the Gulf Coast region by 2015–2016. Further, growing investments in the midstream infrastructure is also contributing to the company's revenues.  

Quanta Services currently has a Zacks Rank #3 (Hold). Some better-ranked companies in the sector include AECOM Technology Corporation (ACM), Willdan Group Inc. (WLDN) and Carlisle Companies Incorporated (CSL). All three sport a Zacks Rank #1 (Strong Buy).