MasTec lands $700M term loan to fund Superior Group buyout
What's the deal? MasTecDealroom has a profile for this one. Try Dealroom → and its subsidiary MasTec North America entered into a new $700 million senior unsecured delayed draw term loan agreement with Bank of AmericaDealroom has a profile for this one. Try Dealroom →, N.A. as administrative agent. The facility splits into $400 million of three-year commitments and $300 million of four-year commitments.
Why now? The money will finance part of MasTec's acquisition of Electrical Specialists, Inc., which does business as The Superior GroupDealroom has a profile for this one. Try Dealroom →. The commitments terminate automatically if the acquisition fails to close.
What are the terms? The three-year tranche carries no amortization, while the four-year tranche amortizes in quarterly installments at 5% per year, rising to 10% after the third anniversary of closing. Interest runs at Term SOFR plus a margin ranging from 1.000% to 1.625%, depending on tranche and the company's leverage ratio and debt rating.
What are the guardrails? The loans are unsecured and unguaranteed. MasTec must keep its consolidated leverage ratio at or below 3.50:1.00 each quarter, though a permitted acquisition exceeding $200 million can lift that ceiling temporarily to 4.00:1.00.
What could go wrong? The agreement limits MasTec's ability to pursue further acquisitions, take on debt, sell assets, and incur liens. It also carries cross-default provisions tied to the company's other significant debt instruments, including its surety indemnity agreement.
The signal: MasTec is leaning on debt markets to fund growth through acquisition, betting that adding The Superior Group strengthens its position while keeping leverage within lender-set bounds.
Read more: MarketScreener
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