Quanta Services Inc (NYSE:PWR) is reported to be finalizing the terms of a contract with Crown Castle International Corp (NYSE:CCI). The contract will facilitate the handing over of its fiber optics business to Crown Castle.
The company announced the new developments for its fiber optic business on April 30. Plans for the sale are already underway, and the two companies expect to finalize the negotiations by the end of the year. Quanta expect to receive $1billion from the deal. It will also receive an additional $800 million in tax proceeds once the deal goes through.
Quanta is initially a contractor for electricity, gas and oil industries. The firm plans on using the earnings to buy more common stock in the energy industry and other strategic investment decisions.
The organization’s current CEO and Vice President, Jim Neil announced that the deal would give the company a chance to concentrate on achieving to place their efforts on the energy markets. The company believes that the market structures will go through significant changes within the next few years.
Quanta also believe the fact that its fiber assets have been valued to its favor is a great opportunity for the company. It will give Quanta a chance to optimize the value of the fiber optic certification activities. This move will allow the company to expand its wide and gain more ground in the industry. It will also be instrumental in gaining new clients and making new contracts that will be beneficial to its future.
Currently, quanta’s subsidiary fiber network subsidiary owns rights to a large portfolio of fiber networks expanding over 10,000 miles. Most of the fiber expanse network serves major cities in the United States. Crown Castle plans on taking advantage of these networks in expanding its business structure.
Crown Castle International Corp (NYSE:CCI) offers the groundwork as well as the technology for wireless distributors to build relay their networks. The new acquisition will give Crown Castle an opportunity to expand massively its activities and boost profitability.
