Sterling to acquire CEC Facilities Group for $505 million

IRVING, Texas - Sterling Infrastructure, Inc. (NASDAQ:STRL), whose stock has delivered an impressive 75.7% return over the past year according to InvestingPro data, announced Tuesday it has signed a definitive agreement to purchase substantially all assets of CEC Facilities Group, a specialty electrical and mechanical contractor, for $505 million.

The transaction includes $450 million in cash and $55 million in Sterling common stock, with an additional earn-out opportunity tied to operating income targets through December 2029. The acquisition is expected to close in the third quarter of 2025, pending customary closing conditions. Sterling’s strong financial position, with an InvestingPro Financial Health Score of "GREAT" and more cash than debt on its balance sheet, suggests solid capability to execute this transaction.

CEC, based in Irving, Texas, will join Sterling’s E-Infrastructure Solutions segment. The electrical contractor primarily serves mission-critical markets, with over 80% of its revenue and backlog coming from semiconductor, data center, and manufacturing sectors.

"CEC has extremely strong relationships with its customers and a history of excellent growth, execution, and profitability," said Joe Cutillo, Sterling’s Chief Executive Officer, in the press release statement.

The acquisition expands Sterling’s service offerings into electrical contracting, complementing its existing site civil infrastructure services. CEC reported that electrical services accounted for over 80% of its 2024 revenue.

Sterling estimates CEC will generate $390-415 million in revenue and $51-54 million in EBITDA for full-year 2025. The company projects the acquisition will be accretive to earnings per share by approximately $0.63-$0.70 on a fully diluted basis for 2025.

Following the acquisition, CEC’s Founder and Chairman Ray Waddell will assume strategic leadership of Sterling’s electrical services platform growth, while CEC’s CEO Daniel Williams will continue leading operations.

Sterling operates through subsidiaries across three segments: E-Infrastructure, Transportation, and Building Solutions, primarily serving the Southern, Northeastern, Mid-Atlantic and Rocky Mountain regions of the United States.

In other recent news, Sterling Infrastructure, Inc. reported impressive financial results for the first quarter of 2025, with an adjusted earnings per share of $1.63, significantly exceeding the forecasted $1.00. The company’s revenue reached $430.9 million, surpassing the anticipated $411.13 million, marking a 7% year-over-year increase. Sterling has also successfully renegotiated its 2019 credit agreement, extending the maturity to June 2028 and expanding the facility’s size, which includes a $300 million term loan and a $150 million revolving credit facility. Furthermore, Sterling Infrastructure has appointed Nicholas Grindstaff as the new Chief Financial Officer, effective July 10, 2025, bringing over 30 years of finance and leadership experience to the role. DA Davidson maintained a Buy rating on Sterling Construction and raised the price target to $205, citing strong earnings growth and operational performance. The firm highlighted Sterling’s strategic mergers and acquisitions as key contributors to its success. Additionally, Sterling’s CEO, Joe Cutillo, expressed optimism about the company’s growth strategies, supported by the updated credit facility. These developments reflect Sterling Infrastructure’s robust position and strategic focus on high-growth infrastructure segments.

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