MasTec Inc. (MTZ) saw its shares climb approximately 6% on Wednesday following the announcement of a $1.65 billion acquisition of The Superior Group, an electrical contractor specializing in data center infrastructure. The deal positions MasTec to capitalize on surging demand for AI-driven data center construction and power networks.
The cash-and-stock transaction, expected to close in mid-to-late July pending customary approvals, includes $1.175 billion in cash, $475 million in MasTec stock, and a 36-month earnout. The acquisition values Superior at roughly 6.9 times its estimated 2026 adjusted EBITDA.
Expanding Data Center Capabilities
Superior, based in Columbus, Ohio, employs approximately 3,000 people and is an IBEW-signatory electrical contractor. The company is projected to generate between $1.6 billion and $1.7 billion in revenue during 2026, with an EBITDA margin of 14% to 15%. Notably, about 90% of Superior's business is tied to data centers, with roughly 70% coming from hyperscale customers. It also boasts a $1.4 billion backlog and operates a 300,000-square-foot prefabrication facility.
Following the acquisition, Superior will become part of MasTec's Power Delivery segment. Management expects this to help increase segment margins from roughly 9% to the low double digits. This move aligns with broader industry trends, as highlighted by recent reports on local opposition blocking $130 billion in data center projects, underscoring the critical need for efficient infrastructure development.
AI Infrastructure Demand Drives Strategy
MasTec has traditionally focused on "outside-the-fence" infrastructure, including power generation, transmission, substations, and communications networks. Superior expands these capabilities into "inside-the-fence" electrical systems, engineering, and integrated building services. This dual capability is increasingly vital as AI investment accelerates, with companies like IREN being shortlisted for a $12 billion Australia data center project and TeraWulf securing a $19 billion AI data center lease deal.
"Superior expands our ability to serve one of the most compelling infrastructure opportunities in the market today—the ongoing buildout of data center, power and mission-critical infrastructure," said MasTec CEO Jose Mas.
Financial Impact and Outlook
MasTec expects the acquisition to contribute immediately to revenue, adjusted EBITDA, adjusted earnings per share, and operating cash flow. For the remainder of 2026, Superior is expected to contribute $800 million to $900 million in revenue, adjusted EBITDA of $100 million to $115 million, and adjusted earnings per share of $0.50 to $0.65. For the full year 2026, Superior is projected to generate $1.6 billion to $1.7 billion in revenue and adjusted EBITDA of $225 million to $250 million. Looking ahead to 2027, management projects revenue of $2.2 billion to $2.5 billion and adjusted EBITDA of $250 million to $275 million.
Mizuho responded by raising its price target on MasTec shares to $502 from $498, while maintaining an Outperform rating. The firm cited the acquisition as a key driver of growth, particularly as AI infrastructure demand continues to broaden, similar to trends seen with Citi boosting TSMC's target on broadening AI demand beyond GPUs.
MasTec expects to generate approximately $1 billion in operating cash flow during 2026, supporting future investments as demand for AI-driven digital infrastructure expands. The acquisition strengthens relationships with hyperscalers, data center developers, and technology customers while adding one of the largest self-performing electrical workforces in the United States.
This article is for informational purposes only and does not constitute financial advice.
