Sterling Infrastructure Acquisition Sets Stage for New Growth Markets

Sterling Infrastructure has acquired CEC Facilities Group, expanding its capabilities in mission-critical electrical and mechanical services across existing and new markets. The acquisition is expected to amplify the company's service portfolio, offering higher value and end-to-end E-Infrastructure solutions to customers. E-Infrastructure Solutions segment contributed 51% to Sterling's total revenues, growing 24.2% YoY to $528.7 million, with a backlog of $1.2 billion, up 44% YoY. The acquisition is expected to boost revenue visibility and profitability for Sterling in the upcoming period.

Sterling Infrastructure has recently expanded its service portfolio by acquiring CEC Facilities Group, a leading provider of mission-critical electrical and mechanical services. This strategic move is expected to amplify Sterling's capabilities in offering higher-value and end-to-end E-Infrastructure solutions to its customers.

The acquisition of CEC Facilities Group is a significant addition to Sterling's E-Infrastructure Solutions segment, which contributed 51% to the company's total revenues in the second quarter of 2025. This segment grew by 24.2% year-over-year (YoY) to $528.7 million, with a backlog of $1.2 billion, up 44% YoY. The acquisition is expected to boost revenue visibility and profitability for Sterling in the upcoming period.

The E-Infrastructure Solutions segment's strong performance is a key driver of Sterling's overall growth. The segment's impressive YoY growth underscores the company's ability to capitalize on market opportunities and expand its footprint in key sectors. The acquisition of CEC Facilities Group is expected to further enhance Sterling's service offerings and geographic reach, positioning the company well for sustained growth.

Sterling Infrastructure's earnings call for the second quarter of 2025 highlighted robust performance across various segments. The company reported an impressive 21% revenue growth, with notable contributions from the E-Infrastructure Solutions and Transportation segments, which grew by 29% and 24%, respectively. The company also achieved a 41% increase in adjusted earnings per share, reaching $2.69. Additionally, adjusted EBITDA rose by 35% to $126 million, and the gross profit margin expanded by 400 basis points to 23.3%.

Despite some challenges in the Building Solutions segment and a sequential decline in Transportation backlog, the overall sentiment was overwhelmingly positive, suggesting a bright future for the company. Sterling's strong cash position, with $699.4 million in cash and a net cash position of $401.2 million, provides financial flexibility for future investments and growth initiatives.

Sterling Infrastructure's acquisition of CEC Facilities Group is a strategic move that aligns with the company's long-term vision of becoming a leading provider of E-Infrastructure solutions. The acquisition is expected to enhance Sterling's service portfolio, offering higher value and end-to-end solutions to customers. As the company continues to capitalize on market opportunities, the acquisition of CEC Facilities Group is poised to amplify Sterling's growth prospects.

References:
[1] https://www.theglobeandmail.com/investing/markets/stocks/STRL-Q/pressreleases/33944037/sterling-infrastructure-shines-in-earnings-call/