Sterling Infrastructure (STRL) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition expands E-Infrastructure services into mission-critical electrical and mechanical contracting, targeting high-growth sectors like data centers, semiconductors, and manufacturing.

• CEC's offerings complement existing services, enabling end-to-end project lifecycle coverage and cross-selling across customer bases and geographies.

• Strong presence in Texas, Rocky Mountain, Southeast, and Southwest regions enhances geographic reach and customer base.

• CEC aligns with desired characteristics: high margins, strong cash flow, and significant maintenance/service exposure.

• Leadership continuity with CEC's founder and CEO ensures cultural, operational, and strategic alignment.

Financial terms and conditions

• Total upfront consideration is $505 million: $450 million in cash and $55 million in common stock, based on a 9.6x multiple of 2025 estimated EBITDA.

• An earn-out is contingent on achieving operating income targets through December 2029.

• CEC's 2025 revenue expected at $390–$415 million, with EBITDA of $51–$54 million and adjusted EPS accretion of $0.63–$0.70 per share annually.

• Upfront cash funded with cash on hand; strong post-transaction balance sheet expected.

Synergies and expected cost savings

• Combined capabilities enable parallel execution of site development and electrical work, reducing project timelines and costs.

• Significant cross-selling opportunities across customer bases and geographies, especially in data centers and semiconductors.

• Recurring service revenue and maintenance offerings enhance customer retention and revenue stability.

• Platform for further organic growth and bolt-on M&A in electrical and mechanical services.