MasTec announced a definitive agreement to acquire The Superior Group for $1.65 billion, marking the infrastructure contractor's largest bet on data center electrical work as hyperscaler capex cycles accelerate. Superior specializes in mission-critical electrical infrastructure, with data centers comprising the majority of its backlog. The deal shifts MasTec's revenue mix toward tech-driven infrastructure and away from traditional utility and telecom projects that have underperformed since 2022.
Superior generated approximately $1.2 billion in revenue over the trailing twelve months, implying a 1.4x revenue multiple at closing. The company operates 14 regional offices across North America and maintains existing contracts with three of the four largest cloud providers. MasTec expects the acquisition to close in the second quarter of 2025, subject to regulatory approval and customary closing conditions. The deal will be funded through a combination of cash on hand and $900 million in new term debt, extending MasTec's net leverage to approximately 2.8x EBITDA pro forma.
The acquisition matters because it converts MasTec from a diversified infrastructure contractor into a hyperscaler dependency play. Data center electrical work carries higher margins than utility construction—Superior's EBITDA margin runs approximately 12% compared to MasTec's blended 8.5%—but the backlog visibility is shorter. Cloud providers negotiate annual capacity agreements, not multi-year utility rate-base contracts. MasTec's revenue concentration in its top five customers will increase from 31% to an estimated 42% post-close, raising execution risk if any single hyperscaler delays capex. The company is trading cyclical infrastructure exposure for cyclical technology exposure, with no diversification benefit.
The debt structure introduces refinancing risk in 2027. MasTec's existing $1.1 billion term loan matures in April 2028, and the new $900 million facility will mature six months earlier. Combined with approximately $400 million in outstanding revolver draws, the company will face $2.4 billion in debt maturities within a 30-month window. If hyperscaler spending moderates or power constraints delay data center builds, MasTec's levered free cash flow may not cover the refinancing gap. The company generated $287 million in operating cash flow in 2024, implying 3.2 years of current cash generation to cover the combined maturities before interest expense.
Operators should monitor hyperscaler capex guidance through mid-2025. Microsoft, Amazon, and Google report quarterly capex in late April and July, providing forward visibility on data center infrastructure spending. Any downward revision to 2026 capex plans will compress Superior's backlog conversion rates. Watch MasTec's credit spreads relative to the high-yield index—the company's 5.875% notes due 2032 currently trade at 340 basis points over Treasuries, near the tight end of the 12-month range. A widening beyond 400 basis points signals debt market concern over integration execution or hyperscaler demand sustainability.
The deal closes the quarter after three hyperscalers report capex that will determine whether Superior's backlog converts or stalls.