What happened

Infrastructure stocks have gotten a lot of attention lately, but you may not have heard much about Quanta Services (PWR -2.32%). The stock is up 10.4% today as of 1 p.m. EDT, as the company is about to make a big entrance into renewable energy.

So what

Quanta Services provides contracting services to energy, utility, and communications industries and counts some of the largest companies among its customers. During its second-quarter earnings conference call, management revealed it is "evaluating potential acquisitions."

This morning, Quanta Services announced it will acquire privately held Blattner Holding Company, a renewable energy infrastructure company headquartered in Avon, Minnesota.

Quanta Services will pay $2.7 billion for the acquisition in cash worth $2.36 billion and 3.3 million shares.

Workers inspecting solar panels with wind turbines in the background.

Image source: Getty Images.

Here are some facts about Blattner Company you'll want to know:

  • It was founded in 1907.
  • It became a 100% renewable-energy focused company in 2006.
  • It operates in wind, solar, and energy storage.
  • In 2020, wind energy brought in 64% of its total revenue worth $2.4 billion.
  • It has long-standing customer relationships with top renewable energy companies, including NextEra Energy and Clearway Energy.
  • It grew revenue at a compound annual rate of 20% in the past three years.

Given Blattner's profile, this seems like a promising acquisition for Quanta Services, especially given that it'll give the company headway into the high-potential renewable energy industry. With utilities and energy companies expanding their renewable energy portfolios, entering the space is a logical next step to growth for Quanta Services.

Now what

Quanta Services expects to close the acquisition by the fourth quarter, and expects it to contribute meaningfully to Quanta Services' cash flows. Last quarter, Quanta Services upgraded its full-year revenue and net income guidance to $12.20 billion-$12.45 billion and $491 million-$543 million, respectively. At those projections, Quanta Services is already on track to deliver a record year, and I wouldn't be surprised to see yet another outlook upgrade if the acquisition is completed this year.