The contractor ranks No. 1 on ENR’s list of the Top 600 Specialty Contractors, posting $12.1 billion in revenue for 2019. It also works in the telecom sector. Blattner noted full-year 2020 revenue of $2.4 billion and earnings of $291 million.

It will become a Quanta operating unit when the transaction closes, expected in the fourth quarter, said Duke Austin, president and CEO of the new parent firm, in a statement.

'Significant Evolution'

"Our industry is on the cusp of significant evolution and this is an opportunity to add additional scale and resources and take advantage of next-generation opportunities emerging in the renewable energy market," said Blattner Co. President Scott Blattner, who will remain in that role.

“Blattner’s services ... expand Quanta’s positioning further in renewables which is expected to accelerate for the foreseeable future,” said Credit Suisse managing director Jamie Cook, terming the deal a strong positive for the utility contractor’s “ near and long-term growth drivers.”  She said Blattner self-performs about 70% of its work.

Blattner says it has completed or been awarded more than 300 wind projects totaling more than 49 GW of installed capacity, as well as about 90 solar projects of 12 GW installed capacity and 17 energy storage projects.

For Blattner, the growth is a turnaround from the late 1990s when it struggled with cash flow and customer non-payment, Scott Blattner said in a previous online profile. He has been president since 1997, the fourth generation of family leadership.

In a 2020 analysis of solar market EPC firms by PV, a solar sector publication, Blattner was ranked No. 3 among top 30 companies in the global market, with Swinerton Renewables at No. 4, Moss Construction at No. 8 and Mortenson Construction at No. 10. Blattner is working on one-third of all solar projects under way across the country in 2021, according to the Minneapolis Star Tribune.

Quanta’s deal for Blattner comes as the Biden administration pushes an ambitious U.S. clean power goal by 2035, and as states have also set key targets, with New York looking to decarbonize its electric grid by 2040 and California setting a 2045 goal for renewables.

The U.S. Energy Dept.'s new Solar Futures Study report estimates that solar could provide 40% of domestic power by 2035 and 45% by 2050.

Quanta revenue fell in 2020 to $11.2 billion, but it has estimated the deal will expand revenue by $2.5 billion to $2.7 billion in 2022, while boosting its earnings from 80 cents to a $1 per share.

The deal follows two smaller Quanta acquisitions in July, totaling $35 million—one in Canada that provides front-end land services for infrastructure development projects and the other, a U.S. data center services firm, according to a 10 Q report filed in early August.

Andrew Wittmann, construction sector analyst for Baird Equity, said the document also showed $181.4 million of Quanta revenue “related to change orders and claims included in contract price adjustments that remain in negotiation.” He said the metric “can sometimes be indicative of eroding project economics” or a client dispute, but he said the 10Q did not confirm that speculation or identify any disrupted projects or owners. Margins had improved since last quarter, he noted, on a telecom project that was described in previous results as “challenged,” with no further detail.

Despite federal optimism on US solar sector growth, the PV analysis predicts that rising system costs may “lead to delays and contract renegotiations" on some solar projects, adding that U.S. EPCs “may struggle to complete individual projects this year as a result of the latest blockage on some photovoltaic module imports.”

Energy analyst Wood Mackenzie says in a new report that pricing for solar energy systems in 2021 will increase year-over-year for the first time since 2014.

Project developers seek boosts in federal tax credits for 10 years, with House Democrats aiming to include a measure in pending infrastructure funding legislation that would allow solar projects to qualify for the full value of the production tax credit, which now is only available to those in wind and geothermal energy sectors.

More Consolidation

In other consolidation moves, design firm and construction manager STV Group Inc., New York City, said it has agreed to acquire Dallas-based CP&Y Inc., an employee-owned engineering, architectural, and field services consultant.

According to STV, which did not disclose terms of the transaction, CP&Y has a staff of about 375 professionals in Texas, Oklahoma, Colorado, Florida, and Virginia. The deal is set to close on Sept. 30.

STV ranks at No. 34 on ENR's Top 500 Design Firms list, reporting about $566 million in 2020 revenue. It is a portfolio company of The Pritzker Organization LLC.  CP&Y ranks at No. 211 on the list, reporting $78.1 million in revenue last year. About 30% is in water and wastewater sector work.

“Joining forces with CP&Y will cement our presence in the Texas infrastructure market and serve as a catalyst to expand our water and wastewater practices nationwide," said Greg Kelly, STV president and CEO.  CP&Y President J.J. Roohms will continue to lead the CP&Y operating group within STV. says Kelly, with former CEO Pete Patel and CFO David Hays joining STV as "senior advisors."