Key Takeaways:
- MasTec acquires Superior Group for $1.65 billion in cash and stock
- The deal adds $1.4 billion in backlog and a 300,000-square-foot prefab facility
- Superior generates about 90 percent of revenue from data center clients
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MasTec buys Superior Group for $1.65B to expand data center electrical work
MasTec's $1.65 billion acquisition of Superior Group brings the electrical contractor inside the fence of America's data center boom, adding $1.4 billion in backlog and a 300,000-square-foot prefabrication facility.
MasTec Inc. agreed to buy The Superior Group for $1.65 billion in cash and stock, adding inside-the-fence electrical capabilities to capture surging demand from hyperscale data center builders. The deal values the Columbus, Ohio-based electrical contractor at about 6.9 times its projected 2026 adjusted EBITDA.
"This acquisition completes the data center strategy MasTec laid out in its May analyst presentation," Mizuho analysts led by David Williams said, raising their price target to $502 from $498 with an Outperform rating. Lazard advised MasTec on the transaction, while UBS represented Superior.
Superior, which generates roughly 90 percent of revenue from data center clients and counts hyperscale operators for about 70 percent of its business, expects $1.6 billion to $1.7 billion in revenue this year. The company employs about 3,000 workers as an IBEW-signatory electrical contractor and operates a 300,000-square-foot prefabrication facility. MasTec shares fell 5.72 percent to $358.85 on the announcement.
The transaction positions MasTec to capture a larger share of the AI-driven data center buildout, projected to require hundreds of billions in infrastructure spending over the next decade. The deal is expected to close in mid-to-late July, subject to regulatory approval.
Deal Structure and Financial Impact
MasTec will pay $1.175 billion in cash and $475 million in its own shares, with an additional earnout tied to Superior's performance over 36 months. The company plans to fund the cash portion through available reserves, its existing credit line, and two delayed draw term loan facilities arranged alongside the transaction.
Superior is expected to contribute $800 million to $900 million in revenue and $100 million to $115 million in adjusted EBITDA for the remainder of 2026, adding $0.50 to $0.65 in adjusted earnings per share. For 2027, MasTec projects Superior will generate $2.2 billion to $2.5 billion in revenue and $250 million to $275 million in adjusted EBITDA.
The acquisition will operate as a distinct group within MasTec's Power Delivery segment, where profit margins are expected to expand into the low double-digit range from about 9 percent currently. Bryan Stewart, Superior's chairman and chief executive officer, will remain in place alongside the existing management team.
Wall Street Weighs In
Several analysts raised their price targets following the announcement. KeyBanc set a $500 target with an Overweight rating, Stifel lifted its target to $455, and TD Cowen increased its target to $445 from $320. Jefferies maintains a $493 price target.
MasTec reported a record $20.3 billion backlog at the end of March, up 28 percent from a year earlier, with new contract awards climbing 18 percent. The company projects about $1 billion in operating cash flow for 2026, providing financial flexibility for future acquisitions.
The deal marks MasTec's largest push into data center infrastructure, expanding beyond its traditional outside-the-fence work in power generation, transmission, and substations into electrical systems and integrated building services. Superior brings a $1.4 billion project backlog and has delivered double-digit compound growth in revenue and net income over the past four years through 2025.
This article is for informational purposes only and does not constitute investment advice.
