MasTec digs the trenches, lays the cable, and builds the towers that power communications. The contractor provides infrastructure construction to telecom vendors, wireless providers, cable TV operators, and energy and utility companies. Its projects include wireless, wireline and satellite communications, as well as electrical utility transmission and distribution, power generation, natural gas and petroleum pipeline infrastructure, wind and solar farms, industrial infrastructure, and water and sewer systems. MasTec serves more than 350 customers, primarily in the US, from some 400 locations nationwide.
Sales and Marketing
MasTec's top 10 customers account for more than 70% of sales; DIRECTV and AT&T both contribute 23%. The rest of the top 10 include El Paso Corporation, Energy Transfer, Talisman Energy, MidAmerican Energy, Dominion Virginia Power, DCP Midstream, Spectra Energy, and EQT.
Sales rose to $3 billion in 2011, up 30% from the prior year (which itself was up more than 40% from 2009); of this amount, two-thirds was attributable to organic growth while acquisitions contributed the last third. The company benefitted from strong demand in the wireless, pipeline, energy transmission, and install-to-the-home sectors.
Net income increased 17% to $106 million on higher revenues and lower expenses as a percentage of sales. The company also benefitted from a pre-tax gain of $29 million related to an equity investment made in 2011.
Communications services account for more than half of MasTec's revenue, but the company is seeing green in the alternative energy market. It anticipates growth in the demand for renewable energy infrastructure, including wind and solar farms, as well as in the development of natural gas pipelines and plants. The company's energy and utilities segment has been steadily growing as a percentage of sales.
In its move to expand, the company has not forgotten where it makes the most cash. It also sees opportunities in wireless infrastructure and the install-to-the-home market. MasTec makes strategic acquisitions to expand into or enhance its operations in these focus areas.
Mergers and Acquistions
In 2011 the company bought Canadian pipeline and facility construction services provider Fabcor for about $30 million, adding access to the energy industry in Canada, primarily in Alberta and British Columbia. Fabcor specializes in pipeline construction, modification, and replacement; compressor and gas plant construction; and plant commissioning support. Also that year MasTec acquired Halsted Communications, an install-to-the-home contractor whose primary customer is DIRECTV, for about $15 million. The tuck-in acquisition expands MasTec's business with DIRECTV and extends its existing install-to-the-home business to include parts of New York, Pennsylvania, and New England.
Other acquisitions include Maryland-based Cam Communications (telecommunication engineering and construction services) and California-based Optima Network (wireless infrastructure services).
Chairman Jorge Mas and family own 27% of MasTec. – less