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Sterling Construction Buys Tealstone, Swaps Credit Facility
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Sterling Construction Company, Inc. (STRL - Free Report) has completed the acquisition of Denton, TX-based concrete construction company, Tealstone Construction for $85 million. Further, this takeover will help it expand in adjacent markets. To partially fund the acquisition, the company has replaced existing asset-based loan and security agreement with a new $85 million credit facility.
Tealstone is well known name in commercial and residential concrete construction in the Dallas-Fort Worth Metroplex. It caters to commercial contractors and multi-family developers, as well as national homebuilders in Texas and Oklahoma. Following the acquisition, Tealstone will continue to operate as a separate subsidiary retaining the Tealstone name.
The Tealstone acquisition will aid Sterling Construction expand commercial projects in the Texas market and also diversify into the private sector. While enhancing revenue and earnings, it is a key step in the company’s strategy of expanding into adjacent markets. Sterling Construction will benefit from Tealstone's long standing relationship with its customers and strong customer base.
The company also entered into a Loan and Security Agreement with the Strategic Credit Group at Oaktree Capital. This provides Sterling Construction with a five-year, $85 million senior secured term loan replacing existing $40 million asset-based facility. Annual interest on the new facility will be LIBOR plus 8.75%. Of this, $55 million will be utilized to fund the Tealstone acquisition, while also providing the company with a strong financial foundation to execute on its long-term strategic plan.
Shares of Sterling Construction outperformed the Zacks categorized Building-Heavy Construction sub industry in the past one year. The stock soared 72.1%, outshining the industry’s gain of 27.6%.
Zacks Rank & Stocks to Consider
Currently, Sterling Construction carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the same sector are Dycom Industries, Inc. (DY - Free Report) , MasTec, Inc. (MTZ - Free Report) and NCI Building Systems, Inc. .
MasTec has delivered an average positive earnings surprise of 54.36% in the last four quarters. The stock carries a Zacks Rank #2 (Buy). NCI Building, another Zacks Rank #2 stock has delivered an average positive earnings surprise of 3.92% in the trailing four quarters.
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Sterling Construction Buys Tealstone, Swaps Credit Facility
Sterling Construction Company, Inc. (STRL - Free Report) has completed the acquisition of Denton, TX-based concrete construction company, Tealstone Construction for $85 million. Further, this takeover will help it expand in adjacent markets. To partially fund the acquisition, the company has replaced existing asset-based loan and security agreement with a new $85 million credit facility.
Tealstone is well known name in commercial and residential concrete construction in the Dallas-Fort Worth Metroplex. It caters to commercial contractors and multi-family developers, as well as national homebuilders in Texas and Oklahoma. Following the acquisition, Tealstone will continue to operate as a separate subsidiary retaining the Tealstone name.
The Tealstone acquisition will aid Sterling Construction expand commercial projects in the Texas market and also diversify into the private sector. While enhancing revenue and earnings, it is a key step in the company’s strategy of expanding into adjacent markets. Sterling Construction will benefit from Tealstone's long standing relationship with its customers and strong customer base.
Sterling Construction Company Inc Price
Sterling Construction Company Inc Price | Sterling Construction Company Inc Quote
The company also entered into a Loan and Security Agreement with the Strategic Credit Group at Oaktree Capital. This provides Sterling Construction with a five-year, $85 million senior secured term loan replacing existing $40 million asset-based facility. Annual interest on the new facility will be LIBOR plus 8.75%. Of this, $55 million will be utilized to fund the Tealstone acquisition, while also providing the company with a strong financial foundation to execute on its long-term strategic plan.
Shares of Sterling Construction outperformed the Zacks categorized Building-Heavy Construction sub industry in the past one year. The stock soared 72.1%, outshining the industry’s gain of 27.6%.
Zacks Rank & Stocks to Consider
Currently, Sterling Construction carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the same sector are Dycom Industries, Inc. (DY - Free Report) , MasTec, Inc. (MTZ - Free Report) and NCI Building Systems, Inc. .
Dycom has delivered an average positive earnings surprise of 17.30% in the last four quarters. The company sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
MasTec has delivered an average positive earnings surprise of 54.36% in the last four quarters. The stock carries a Zacks Rank #2 (Buy). NCI Building, another Zacks Rank #2 stock has delivered an average positive earnings surprise of 3.92% in the trailing four quarters.
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>