SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant |X|
Filed by a party other than the Registrant |_|
Check the appropriate box:
|_| Preliminary Proxy Statement
|_| Confidential, for Use of the Commission Only (as Permitted by Rule
14a-6(e)(2))
|_| Definitive Proxy Statement
|X| Definitive Additional Materials
|_| Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
QUANTA SERVICES, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
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paid previously. Identify the previous filing by registration statement
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EXPLANATORY NOTE
Quanta Services, Inc., a Delaware corporation ("Quanta
Services"), is filing the materials contained in this Schedule 14A with the
Securities and Exchange Commission on April 15, 2002 in connection with the
solicitation of proxies for electing the board of directors of Quanta Services
at the 2002 annual meeting of Quanta Services' stockholders.
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[QUANTA SERVICES, INC. LOGO] PRESS RELEASE
FOR IMMEDIATE RELEASE
Contacts:
James Haddox, CFO Jim Barron Ken Dennard / kdennard@easterly.com
Reba Reid Jonathan Gasthalter Lisa Elliott / lisae@easterly.com
Quanta Services, Inc. Citigate Sard Verbinnen Easterly Investor Relations
713-629-7600 212-687-8080 713-529-6600
QUANTA SENDS LETTER TO STOCKHOLDERS
HOUSTON - APRIL 15, 2002 - Quanta Services, Inc. (NYSE:PWR), a leading provider
of specialized contracting services to the electric power, gas,
telecommunications and cable television industries, today sent the following
letter to stockholders with its definitive proxy statement.
April 15, 2002
Dear Quanta Stockholder:
It's decision time. And you have an important choice. Your Board needs your
support and your vote.
Our largest stockholder - AQUILA, INC. (formerly UtiliCorp) - IS TRYING TO TAKE
CONTROL OF QUANTA WITHOUT OFFERING YOU ANYTHING. No premium for your shares. No
solid protections from future abusive behavior against minority stockholders. No
real power over what they might do to Quanta if they take control. Nothing,
except the vague promise that they may try to sell the company or buy back
shares if it suits their agenda.
STOP AQUILA: DON'T LET THEM GET QUANTA FOR NOTHING
PLEASE SIGN AND SEND IN THE WHITE PROXY CARD IMMEDIATELY
We urge you to DISCARD any materials you receive from Aquila, including their
Gold proxy card. Your vote for Quanta's director nominees at our May 23, 2002
annual meeting is vitally important to Quanta and the value of your investment.
VOTE FOR QUANTA'S NOMINEES: THEY ARE WORKING FOR YOU
You should know THAT THE EXISTING QUANTA BOARD IS OPEN TO ALL VALUE CREATING
ALTERNATIVES - including share buybacks. The only thing that Quanta's board is
NOT OPEN to is letting Aquila capture value that is rightfully yours - or
letting Aquila use Quanta's cash and credit capacity to take control for itself.
DESPITE AQUILA'S DISINGENUOUS RHETORIC, AQUILA HAS ACTUALLY BEEN AN IMPEDIMENT
IN OUR EFFORTS TO GENERATE VALUE FOR YOU. Why? Aquila has been unwilling to work
with us on potential extraordinary transactions. They simply want control. In
addition, Aquila's large stake in Quanta has potentially deterred a would be
acquirer and, we believe, could make some major utilities wary of doing business
with us. Further, its tactless posturing about our future has created concern
among our customers and employees.
AQUILA'S HAND-PICKED NOMINEES ARE PLEDGED TO
AQUILA'S SELF-SERVING AGENDA
Most of Aquila's nominees don't even pretend to be independent. If elected,
their job is to deliver control of Quanta to Aquila. And if you let them
succeed, Aquila could do what it likes with your investment - whether you like
it or not.
Only four months ago, Aquila opportunistically squeezed out the minority
stockholders in its highest growth subsidiary to take advantage of a weak
market, thus inflicting steep losses for minority investors. Aquila, including
two of Aquila's nominees for Quanta's Board, is being sued by minority
stockholders who feel abused by them. This is not the only time in recent memory
that Aquila has been sued by minority stockholders for mistreatment. A few years
ago, Aquila squeezed out the minority in their controlled subsidiary, Aquila Gas
Pipeline Corporation, at a lowball price over the objections of the special
committee of Aquila Gas Pipeline directors. COULD THIS HAPPEN TO YOU? IS HANDING
CONTROL TO SUCH PEOPLE IN YOUR BEST INTERESTS?
Aquila has said over and over again in SEC filings and in presentations to its
own investors that earnings consolidation with Quanta TO BENEFIT AQUILA'S
FINANCIAL STATEMENTS is a main priority:
>> Aquila is "considering whether to pursue a transaction with [Quanta] that
would enable [Aquila] to ENJOY THE BENEFIT OF FINANCIAL STATEMENT
CONSOLIDATION for accounting purposes."
- Amendment No. 8 to UtiliCorp (Aquila) Schedule 13D,
dated May 25, 2000.
>> "[Aquila] intends to increase its percentage of ownership of [Quanta]
to...ENJOY THE BENEFITS OF FINANCIAL STATEMENT CONSOLIDATION for accounting
purposes."
- Amendment No. 12 to UtiliCorp (Aquila) Schedule 13D,
dated September 28, 2001.
>> "With regard to Quanta, WE VERY MUCH WANT TO ACHIEVE CONSOLIDATION."
- Aquila chief financial officer Daniel J. Streek during
Aquila's February 7, 2002 Fourth Quarter 2001 Earnings
Conference Call.
Even in the materials it is sending to you - Quanta shareholders - Aquila admits
(although you need to read the fine print to see it) that IT INTENDS TO USE YOUR
MONEY TO TAKE CONTROL OF QUANTA through a self-tender: "Aquila and the Aquila
nominees are committed to implementing a joint Company self-tender/Aquila tender
offer for sufficient shares of Common Stock that will result in Aquila owning
more than 50% of the outstanding Common stock.... [Quanta] will finance the
self-tender offer through internally-generated funds and borrowings...".(1) What
they don't tell you is how much debt they plan to put on your Company to achieve
their accounting goals.
QUANTA CONTINUES TO OUTPERFORM ITS PEERS
AND HAS EXCELLENT LONG-TERM PROSPECTS
Contrary to public statements made by Aquila - designed we believe to mislead
you - Quanta has performed strongly relative to its peers in a very difficult
market and has excellent long-term prospects as the premier national contracting
solutions franchise. In 2001, Quanta generated
>> Record revenues, concluding a three-year period of revenue growth that
outpaced its peers;
>> Industry leading profitability with higher EBIT and EBITDA margins
than its peers;
>> EPS growth above its peers; and
>> Record cash flow from operations.
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(1) Aquila Schedule 14A, Section 13, dated April 3, 2002.
2
[Bar Graph titled "QUANTA PERFORMANCE: RECORD REVENUES"
($ in millions) for the years 1997, 1998, 1999, 2000 & 2001 (as reported) with
points as follows:
1997-$183
1998-$334
1999-$926
2000-$1,793
2001-$2,015]
[Bar Graph titled "RECORD CASH FLOW FROM OPERATIONS"
($ in millions) for the years 1998, 1999*, 2000* & 2001* with
points as follows:
1998-$8
1999-$46
2000-$45
2001-$210
*Before merger and special charges]
[Bar Graph titled "EBITDA GROWTH" ($ in millions) for the years
1997, 1998, 1999*, 2000* & 2001* with
points as follows:
1997-$25
1998-$45
1999-$159
2000-$310
2001-$292
*Before merger and special charges]
[Bar Graph titled "INDUSTRY LEADING PROFITABILITY" showing EBIT and EBITDA
margins of Quanta, Arguss, Dycom and MasTec for 2001 with points as follows:
EBIT 2001 EBITDA 2001
----------------------------- ----------------------------
Company Margin Company Margin
----------------------------- ----------------------------
Quanta 11%* Quanta 15%*
Arguss 5% Arguss 10%
Dycom 9% Dycom 14%
MasTec 6% MasTec 11%
*Before merger and special charges]
Furthermore, Quanta has successfully maintained a strong balance sheet
throughout the industry downturn and has the financial flexibility to fuel
growth as industry conditions improve. Consider what some analysts have had to
say about Quanta:
>> "QUANTA TURNED IN A SOLID OVERALL PERFORMANCE [IN THE FOURTH QUARTER]."
- Mark Hughes, Suntrust Robinson Humphrey Equity Research
Report, February 14, 2002 (2)
>> "WE WOULD BE BUYERS OF PWR, AS THE COMPANY IS WELL POSITIONED TO BENEFIT
FROM INCREASED OUTSOURCING AND NEW CUSTOMER ACQUISITIONS IN ITS ELECTRIC
POWER BUSINESS."
- Carl Palitti, Gerard Klauer Mattison Equity Research Report,
February 15, 2002 (2)
>> "QUALITY 4Q RESULTS AND IMPROVING BALANCE SHEET STRENGTHEN MANAGEMENT'S
CASE FOR INDEPENDENCE IN THE IMMINENT PROXY FIGHT WITH [AQUILA]."
- Evan Smith, Sanders Morris Harris Equity Research Report,
February 14, 2002 (2)
>> "WE LIKE [QUANTA] MANAGEMENT'S FOCUS ON 1) CASH GENERATION 2) GROSS MARGIN
IMPROVEMENT/STABILIZATION, 3) BETTER PRODUCTIVITY."
- Chris Gutek, Morgan Stanley Equity Research Report,
February 15, 2002 (2)
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(2) Consent of author or publication for inclusion in proxy solicitation
materials was neither sought nor gained.
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AQUILA'S PERFORMANCE HAS BEEN WEAK
While Aquila criticizes us, its own performance should be questioned. The facts
speak for themselves:
- Aquila shares lost 20% of their value over the last six
months;
- Aquila recently was downgraded by Fitch rating service to
BBB-, just above junk bond status;
- Aquila is engaged in a dispute with Chubb over their
agreement to collateralize $570 million worth of surety bonds;
and
- We believe that Aquila cannot meet the earnings expectations
it has set for Wall Street unless it can consolidate Quanta's
earnings.
QUANTA'S NOMINEES SHARE YOUR GOAL TO BUILD VALUE
QUANTA'S NOMINEES ARE:
- Responsible for and still supervising almost $700 million,
or approximately 35%, of Quanta's 2001 revenues.
- Owners of 5% of Quanta's stock;
- Very knowledgeable about our business, with 84 years in
aggregate of direct operating experience;
- Exploring all value creation avenues for Quanta and its
stockholders; and,
- Willing to consider any transaction - including any that
Aquila would propose - but only if it is fair to all Quanta
stockholders.
Consider what one analyst recently said:
>> "WE THINK CURRENT MANAGEMENT IS BEST SUITED TO RUN QUANTA AND BELIEVE
STOCKHOLDERS SHOULD SUPPORT THEM IN THE UPCOMING PROXY BATTLE [WITH
AQUILA.]"
- Carl Palitti, Gerard Klauer Mattison Equity Research Report,
February 15, 2002 (2)
ONLY YOU CAN PUT A STOP TO AQUILA'S ABUSIVE TACTICS BY VOTING FOR QUANTA'S
NOMINEES. Your Board of Directors recommends that you SIGN AND RETURN QUANTA'S
WHITE PROXY CARD EVEN IF YOU HAVE ALREADY SENT IN AQUILA'S GOLD CARD.
AND REMEMBER - NOT VOTING WILL MAKE IT EASIER FOR AQUILA
MAKE YOUR CHOICE - BE HEARD - PLEASE VOTE!
Because Aquila controls 34% of the voting power of Quanta's stock and the
election of directors depends only upon the number of votes cast, to elect
Quanta's nominees ALL QUANTA STOCKHOLDERS MUST STEP FORWARD AND PARTICIPATE. If
you have any questions about this process, you can call MacKenzie Partners,
Inc., our proxy solicitor, toll free at 800-322-2885, or us. Our goal in the
coming months is to continue Quanta's strong performance and to get out the vote
against Aquila's nominees. We hope that we will be able to count on your
support.
Very truly yours,
By: /s/ Vincent D. Foster By: /s/ John R. Colson
Vincent D. Foster John R. Colson
Chairman Chief Executive Officer
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(2) Consent of author or publication for inclusion in proxy solicitation
materials was neither sought nor gained.
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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.
IMPORTANT INFORMATION
Quanta Services, Inc. has filed a proxy statement with the Securities and
Exchange Commission relating to Quanta's solicitation of proxies from its
stockholders with respect to the Quanta Services, Inc. 2002 annual meeting of
stockholders. QUANTA SERVICES, INC. ADVISES SECURITY HOLDERS TO READ ITS PROXY
STATEMENT IN ITS ENTIRETY, BECAUSE IT CONTAINS IMPORTANT INFORMATION. Quanta's
proxy statement and other relevant documents are available for free at
www.sec.gov. You may also obtain a free copy of Quanta's proxy statement by
writing to Quanta Services, Inc. at 1360 Post Oak Boulevard, Suite 2100,
Houston, Texas 77056 or by contacting MacKenzie Partners, Inc., toll free at
1-800-322-2885. Detailed information regarding the names, affiliation and
interests of individuals who may be deemed participants in the solicitation of
proxies of Quanta's stockholders is available in the proxy statement filed by
Quanta with the SEC.
This letter contains various forward-looking statements and information,
including management's expectations regarding the future performance of Quanta.
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 including, among other matters,
future growth in the electric utility and telecommunications outsourcing
industry and the ability of Quanta to complete acquisitions and to effectively
integrate the operations of acquired companies, and uncertainties relating to
Aquila's hostile proxy fight for the Company, as well as general risks related
to the industries in which Quanta, its customers and its suppliers operate.
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, as amended.
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