UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE TO
Tender Offer Statement under Section 14(d)(1) or 13(e)(1)
of the Securities Exchange Act of 1934
QUANTA SERVICES, INC.
(Name of Subject Company (Issuer) and Filing Person)
Options to Purchase Common Stock, par value $.00001 per share,
Having an Exercise Price of $10.00 or More
(Title of Class of Securities)
74762E 10 2
(CUSIP Number of Class of Securities)
(Underlying Common Stock)
Dana A. Gordon
Vice President, Secretary and General Counsel
Quanta Services, Inc.
1360 Post Oak Blvd., Suite 2100
Houston, Texas 77056
(713) 629-7600
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications on Behalf of Filing Person)
With a copy to:
Eric A. Blumrosen
Gardere Wynne Sewell LLP
1000 Louisiana, Suite 3400
Houston, Texas 77002-5007
(713) 276-5500
CALCULATION OF FILING FEE
Transaction Valuation* Amount of Filing Fee
Not applicable Not applicable
* Calculated solely for purposes of determining the filing fee.
[ ] Check the box if any part of the fee is offset as provided by Rule
0-11(a)(2) and identify the filing with which the offsetting fee was previously
paid. Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
Amount previously paid: Not applicable. Filing party: Not applicable. Form of
registration No.: Not applicable. Date filed: Not applicable.
[x] Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
Check the appropriate boxes below to designate any transactions to which the
statement relates:
[ ] third party tender offer subject to Rule 14d-1.
[x]issuer tender offer subject to Rule 13e-4.
[ ] going-private transaction subject to Rule 13e-3.
[ ] amendment to Schedule 13D under Rule 13d-2.
Check the following box if the filing is a final amendment reporting the results
of the tender offer. [ ]
ITEMS 1 THROUGH 11.
Not applicable.
ITEM 12. EXHIBITS.
Text of Press Release issued by Quanta Services, Inc. on December 23, 2002.
Text of Interoffice Memorandum sent to all Quanta Services, Inc. employee and
consultant stock option holders on December 23, 2002.
ITEM 13. INFORMATION REQUIRED BY SCHEDULE 13E-3.
Not applicable.
PRESS RELEASE
Quanta Services Closes Additional $72.9 Million Equity Investment by First
Reserve Corporation
HOUSTON, Dec. 23 /PRNewswire-FirstCall/ -- Quanta Services, Inc. (NYSE: PWR -
News) announced today that it has closed on the second equity investment by
First Reserve Fund IX, L.P., a private equity fund managed by First Reserve
Corporation, after successfully amending certain provisions of its agreements
with its lenders and senior secured note holders.
First Reserve Corporation has purchased 2,430,741 shares of Series E Preferred
Stock for $30.00 per share, each share of which, upon shareholder approval, will
be convertible into ten common shares. Proceeds from the sale of shares to First
Reserve will be used initially to pay down outstanding balances under the
company's credit facility. As announced on October 16, 2002, the First Reserve
Fund purchased from Quanta 8,666,666 shares of common stock at $3.00 per share,
and purchased from Aquila, Inc. 3,303,100 shares of Quanta common stock at $3.00
per share and 939,380 shares of Quanta Series A Preferred Stock (convertible
into 4,696,900 shares of common stock) at $3.00 per common share equivalent.
"We are very pleased with First Reserve becoming the largest shareholder in
Quanta and providing growth capital," stated John Colson, chairman and chief
executive officer. "We believe we are well served by having a partner like First
Reserve on our team."
Ben Guill, president of First Reserve, has joined the Company's board of
directors. In addition, First Reserve has the right to nominate two other
members to the Company's board of directors.
First Reserve now owns approximately 37 percent of Quanta's voting stock,
assuming full conversion of the Series E Preferred Stock and Series A Preferred
Stock. A meeting of Quanta's stockholders to approve the convertibility of the
Series E Preferred Stock is scheduled for December 27, 2002. First Reserve has
an agreement with Quanta not to exceed a 37 percent investment without the
consent of Quanta's independent directors.
Quanta also announced today that its Board has approved a voluntary program to
exchange eligible options for restricted stock. Under the program, employees
holding stock options granted under the company's 2001 Stock Incentive Plan with
a per share exercise price equal to or greater than $10.00, have the opportunity
to cancel those options in exchange for restricted shares of the company's
common stock. The restricted stock issued in the exchange will vest over a
three-year period. If all eligible employees accept the offer, approximately 7.8
million outstanding options will be cancelled and approximately 3.2 million
shares of restricted common stock will be issued. In conjunction with the offer,
the number of shares of common stock that may be issued under Quanta's 2001
Stock Incentive Plan will be reduced from 15 percent of common stock outstanding
to 12 percent of common stock outstanding (in each case, assuming full
conversion of the company's Series A and Series E convertible stock).
Based in Houston, Texas and in Greenwich, Connecticut, First Reserve is an
independently owned firm that invests exclusively within the energy and
energy-related sectors of the world economy. It is the leading private equity
firm specializing in the energy industry with $2.6 billion under management.
First Reserve is currently the largest shareholder of Dresser, Inc., Chicago
Bridge & Iron, Pride International, and Superior Energy Services.
Quanta Services, Inc. is a leading provider of specialized contracting services,
delivering end-to-end network solutions for electric power, gas,
telecommunications and cable television industries. The company's comprehensive
services include designing, installing, repairing and maintaining network
infrastructure nationwide.
This press release contains various forward-looking statements and information
that are based on management's belief as well as assumptions made by and
information currently available to management. Although the Company believes
that the expectations reflected in such forward-looking statements are
reasonable, it can give no assurance that such expectations will prove to have
been correct. Such statements are subject to certain risks, uncertainties and
assumptions. Should one or more of these risks materialize, or should underlying
assumptions prove incorrect, actual results may vary materially from those
expected. For a discussion of the risks, investors are urged to refer to the
Company's reports filed under the Securities Exchange Act of 1934.
Contacts: James Haddox, CFO Ken Dennard / kdennard@drg-e.com
Reba Reid Lisa Elliott / lisae@drg-e.com.com
Quanta Services, Inc. DRG&E
713-629-7600 713-529-6600
INTEROFFICE MEMORANDUM
TO: All Quanta Services Stock Option Holders
FROM: John Colson
DATE: December 23, 2002
SUBJECT: Stock Option Exchange Program
The Quanta Board of Directors has approved a voluntary program to exchange
eligible stock options for restricted stock. We have been working with the Board
for a while on this program and it reflects our belief that our employees are
our most valuable asset.
We have all watched as our stock price has been carried down by market
conditions. Many of us have stock options valued at four, ten and even fifteen
times the current deflated stock price. If you hold stock options with a per
share exercise price equal to or greater than $10, the stock option exchange
program will give you the opportunity to voluntarily cancel those options in
exchange for restricted shares of Quanta's common stock. The restricted shares
will vest over 3 years.
Your options will be exchanged at a rate or "conversion ratio" determined partly
by the current stock price. We currently estimate this ratio to be one
restricted share for every 2.7 options you exchange.
If you hold eligible options, you will be receiving additional information by
the end of January. The packet will outline the exchange process, conversion
ratio, tax implications and other information relating to the exchange program.
Additionally, we will conduct teleconference calls where you will have the
opportunity to ask questions about the program and the process.
In the meantime, please contact the legal department with any questions you may
have.
Happy Holidays!
THE DESCRIPTION OF THE STOCK OPTION EXCHANGE PROGRAM CONTAINED HEREIN IS NEITHER
AN OFFER TO PURCHASE NOR A SOLICITATION OF AN OFFER TO SELL SECURITIES OF QUANTA
SERVICES, INC. AT THE TIME THE OFFER TO EXCHANGE IS COMMENCED, QUANTA SERVICES,
INC. WILL FILE A TENDER OFFER STATEMENT WITH THE SECURITIES AND EXCHANGE
COMMISSION WITH RESPECT TO THE OFFER. THE TENDER OFFER STATEMENT (INCLUDING AN
OFFER TO EXCHANGE, A RELATED LETTER OF TRANSMITTAL AND OTHER OFFER DOCUMENTS)
WILL CONTAIN IMPORTANT INFORMATION THAT SHOULD BE READ CAREFULLY BEFORE ANY
DECISION IS MADE WITH RESPECT TO THE OFFER. THE TENDER OFFER STATEMENT
(INCLUDING AN OFFER TO EXCHANGE, A RELATED LETTER OF TRANSMITTAL AND OTHER
DOCUMENTS) WILL BE AVAILABLE AT NO CHARGE AT THE SECURITIES AND EXCHANGE
COMMISSION'S WEBSITE AT WWW.SEC.GOV.