Seeking to expand its presence in the surge of data center development, Quanta Services, a Houston-based platform for industrial energy and power services, announced Thursday the completion of its acquisition of mechanical and plumbing specialists Dynamics Services for $1.35 billion.
The amount consists of $1.15 billion in cash and about $200 million in Quanta stock. The deal also includes a potential earnout that could add as much as $216 million to the purchase price if certain performance metrics are met.
Dynamic Systems is an Austin-based engineering and construction process firm founded in 1988. Though it has strategic offices in Atlanta, Salt Lake City, New York and Boston, the company has a heavy presence throughout Texas — in Houston, San Antonio, College Station, Fort Worth, Lubbock and San Antonio, along with a fabrication shop in Buda.
Donald Wayne is SVP and general counsel of Quanta in Houston. Allison Jones, senior counsel of strategic transactions, handled the deal in-house for Quanta. Cindy Beck is general counsel of Dynamic Systems in Austin.
J.P. Morgan Securities was the exclusive financial advisor to Dynamic Systems. The San Antonio firm of Elder Bray & Bankler advised as outside legal counsel.
King & Spalding was outside legal counsel to Quanta Services.
The King & Spalding legal team was led by Mitch Tiras, Jonathan Newton and Austin Paalz (all of Houston) and included Charles McGee (Houston), Thomas Hafen (Houston), Kim Cagle (Houston), Hannah Grayem (Houston), Jeff Spigel (Washington, D.C.), Brian Meiners (Washington, D.C.), Jake Downing (Chicago), Sydney Lampard (Washington, D.C.).
Quanta expects to allow Dynamic Systems to operate as an independent subsidiary and, accordingly, plans to keep current management in place.
For three years ending December 31, 2024, Dynamic Systems saw double-digit growth with expected 2025 revenues of $1.0 to $1.1 billion. For the full year of 2026 Quanta expects Dynamic Systems to contribute $1.25 billion to $1.45 billion, adjusted EBITDA of $125 million to $175 million without synergy assumptions.
Of particular importance to data center development, the company specializes in the fabrication and installation of intricate, high purity piping systems, HVAC piping and exhaust processes for a variety of critical industries: healthcare, laboratory life sciences, microelectronics and food and beverage manufacturing. Quanta said those markets services complement almost completely Quanta’s broad experience in the utility infrastructure side of the market, providing power, renewable energy, communications and other pipeline energy solutions.
Said Duke Austin, president and CEO of Quanta: “Dynamic Systems provides Quanta a mechanical solutions platform that expands our total addressable market, diversifies our customer base and enhances our ability to provide cost- and labor-certain infrastructure solutions at scale. Dynamic Systems operates in growing end-markets, has a strong and visible opportunity pipeline and an accretive contribution to Quanta’s growth, cash flow conversion, returns and earnings per share.”
Russell Rehmann, who will continue as CEO of DSI, cited the cultural compatibility of the two companies as an important ingredient in the deal. “From our first conversations, it was clear that Quanta’s leadership shares the long-standing values, goals, and mindset of Dynamic Systems.”