We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Sterling Expands E-Infrastructure Platform With CEC Buyout, Stock Up
Read MoreHide Full Article
Key Takeaways
STRL will acquire CEC Facilities Group for $505M to boost its E-Infrastructure capabilities.
CEC brings strength in data centers and semiconductors, with end-to-end electrical services.
The deal is expected to enhance ROIC and expand STRL's platform via cross-selling and M
Sterling Infrastructure, Inc. (STRL - Free Report) has signed a definitive agreement to acquire CEC Facilities Group, LLC, a specialty electrical and mechanical contractor based in Irving, TX. The deal is valued at $505 million, including $450 million in cash and $55 million in Sterling Common Stock.
The transaction is expected to close in the third quarter of 2025, after which CEC will join the company’s E-Infrastructure Solutions segment. The agreement also includes an earn-out if CEC meets certain operating income targets through Dec. 31, 2029.
Shares of this Texas-based E-Infrastructure Solutions, Building Solutions and Transportation Solutions provider gained 5.6% during yesterday’s trading session and 1.2% in after-hours trading.
Assessing the Strategic Value of the Deal for STRL
Sterling is set to expand its E-Infrastructure capabilities through this strategic acquisition. CEC is a non-union electrical contractor with operations focused on fast-growing markets such as data centers, semiconductors and manufacturing. A majority of CEC’s revenues and backlog are linked to these mission-critical sectors. The company provides end-to-end services including design, engineering, installation and maintenance for complex electrical systems.
The acquisition will allow Sterling to strengthen its position across the full project lifecycle, including ongoing maintenance and upgrade work. CEC’s services align well with Sterling’s existing E-Infrastructure platform. The combined business is expected to benefit from cross-selling opportunities and a broader customer base. Sterling has an established presence in the data center segment, while CEC brings strength in the semiconductor market, along with coverage across Texas and other key regions.
The addition of CEC also supports Sterling’s financial profile. CEC has a strong growth record, with an estimated revenue CAGR of around 20% and an EBITDA margin of approximately 13% in 2025. The deal is expected to be accretive to Sterling’s return on invested capital (ROIC). The company also sees scope to expand the electrical services platform further through organic growth and targeted M&A, supported by favorable market trends across CEC’s core sectors.
Estimated Financial Contribution in 2025
In 2025, CEC is projected to generate $390-$415 million in revenues and $51 million to $54 million in EBITDA. Estimated adjusted EPS accretion for Sterling is between 63 cents and 70 cents per diluted share. The proportion of revenue and earnings contribution from CEC to Sterling will depend on the deal’s closing date. Based on current expectations, the acquisition is likely to contribute around five months of financial results in 2025.
STRL Stock’s Price Performance
Image Source: Zacks Investment Research
Shares of Sterling have gained 87.5% over the past three months, outperforming 25.5% growth in the Zacks Engineering - R and D Services industry. The company is benefiting from the E-Infrastructure segment’s stability, strong backlog, inorganic growth efforts and steady bid activity in key transportation markets.
The company delivered a trailing four-quarter earnings surprise of 8.9%, on average. The stock has increased 26.8% in the past year. The Zacks Consensus Estimate for AECOM’s fiscal 2025 sales and EPS implies an increase of 13.9% and 5.6%, respectively, from a year ago.
EMCOR currently holds a Zacks Rank #2. The company delivered a trailing four-quarter earnings surprise of 22.8%, on average. The stock has increased 24.8% in the past year.
The consensus estimate for EMCOR’s 2025 sales and EPS implies an increase of 12.7% and 9.6%, respectively, from a year ago.
Gibraltar currently carries a Zacks Rank #2. The company delivered a trailing four-quarter earnings surprise of 3.1%, on average. The stock has lost 18.8% in the past year.
The Zacks Consensus Estimate for Gibraltar‘s 2025 sales and EPS implies an increase of 9.3% and 15.8%, respectively, from a year ago.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Sterling Expands E-Infrastructure Platform With CEC Buyout, Stock Up
Key Takeaways
Sterling Infrastructure, Inc. (STRL - Free Report) has signed a definitive agreement to acquire CEC Facilities Group, LLC, a specialty electrical and mechanical contractor based in Irving, TX. The deal is valued at $505 million, including $450 million in cash and $55 million in Sterling Common Stock.
The transaction is expected to close in the third quarter of 2025, after which CEC will join the company’s E-Infrastructure Solutions segment. The agreement also includes an earn-out if CEC meets certain operating income targets through Dec. 31, 2029.
Shares of this Texas-based E-Infrastructure Solutions, Building Solutions and Transportation Solutions provider gained 5.6% during yesterday’s trading session and 1.2% in after-hours trading.
Assessing the Strategic Value of the Deal for STRL
Sterling is set to expand its E-Infrastructure capabilities through this strategic acquisition. CEC is a non-union electrical contractor with operations focused on fast-growing markets such as data centers, semiconductors and manufacturing. A majority of CEC’s revenues and backlog are linked to these mission-critical sectors. The company provides end-to-end services including design, engineering, installation and maintenance for complex electrical systems.
The acquisition will allow Sterling to strengthen its position across the full project lifecycle, including ongoing maintenance and upgrade work. CEC’s services align well with Sterling’s existing E-Infrastructure platform. The combined business is expected to benefit from cross-selling opportunities and a broader customer base. Sterling has an established presence in the data center segment, while CEC brings strength in the semiconductor market, along with coverage across Texas and other key regions.
The addition of CEC also supports Sterling’s financial profile. CEC has a strong growth record, with an estimated revenue CAGR of around 20% and an EBITDA margin of approximately 13% in 2025. The deal is expected to be accretive to Sterling’s return on invested capital (ROIC). The company also sees scope to expand the electrical services platform further through organic growth and targeted M&A, supported by favorable market trends across CEC’s core sectors.
Estimated Financial Contribution in 2025
In 2025, CEC is projected to generate $390-$415 million in revenues and $51 million to $54 million in EBITDA. Estimated adjusted EPS accretion for Sterling is between 63 cents and 70 cents per diluted share. The proportion of revenue and earnings contribution from CEC to Sterling will depend on the deal’s closing date. Based on current expectations, the acquisition is likely to contribute around five months of financial results in 2025.
STRL Stock’s Price Performance
Image Source: Zacks Investment Research
Shares of Sterling have gained 87.5% over the past three months, outperforming 25.5% growth in the Zacks Engineering - R and D Services industry. The company is benefiting from the E-Infrastructure segment’s stability, strong backlog, inorganic growth efforts and steady bid activity in key transportation markets.
STRL’s Zacks Rank & Other Key Picks
Sterling currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks from the Construction sector are AECOM (ACM - Free Report) , EMCOR Group, Inc. (EME - Free Report) and Gibraltar Industries, Inc. (ROCK - Free Report) .
AECOM presently has a Zacks Rank #2. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
The company delivered a trailing four-quarter earnings surprise of 8.9%, on average. The stock has increased 26.8% in the past year. The Zacks Consensus Estimate for AECOM’s fiscal 2025 sales and EPS implies an increase of 13.9% and 5.6%, respectively, from a year ago.
EMCOR currently holds a Zacks Rank #2. The company delivered a trailing four-quarter earnings surprise of 22.8%, on average. The stock has increased 24.8% in the past year.
The consensus estimate for EMCOR’s 2025 sales and EPS implies an increase of 12.7% and 9.6%, respectively, from a year ago.
Gibraltar currently carries a Zacks Rank #2. The company delivered a trailing four-quarter earnings surprise of 3.1%, on average. The stock has lost 18.8% in the past year.
The Zacks Consensus Estimate for Gibraltar‘s 2025 sales and EPS implies an increase of 9.3% and 15.8%, respectively, from a year ago.