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ACQUISITIONS | 9 Months Ended
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Sep. 30, 2025
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract] |
ACQUISITIONS |
3. | ACQUISITIONS
CEC Acquisition On September 1, 2025, Sterling acquired substantially all of the assets of Irving, Texas-based CEC Facilities Group, LLC, et al (“CEC”) (the “CEC Acquisition”). The integration of CEC, a premier electrical and mechanical specialty contractor, broadens Sterling's array of valuable E-Infrastructure services, extends the segment into the next critical phases of the project lifecycle, and creates significant opportunities to cross-sell services. The CEC Acquisition is accounted for using the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations. The results of CEC since the date of acquisition are included within our E-Infrastructure Solutions segment. Purchase Consideration—Sterling completed the CEC Acquisition for a purchase price of $560,778, net of cash acquired, detailed as follows:
Cash consideration transferred, net of cash acquired | $ | 444,760 |
Equity consideration transferred (285 shares at $278.53 per share(1)) | 79,458
Earn-out (2) | 39,194
Estimated working capital adjustment | (2,633)
Total fair value of consideration | $ | 560,778 |
(1) Sterling’s closing stock price on August 29, 2025. (2) The earn-out arrangement requires the Company to pay up to $80,000 based upon CEC’s achievement of certain operating income targets. Preliminary Purchase Price Allocation—The aggregate purchase price noted above was allocated to the assets and liabilities acquired based upon their estimated fair values at the acquisition closing date, which were based, in part, upon a preliminary external appraisal and valuation of certain assets, including specifically identified intangible assets. The excess of the fair value of consideration over the preliminary estimated fair value of the net tangible and identifiable intangible assets acquired totaling $304,199 was recorded as goodwill. This goodwill represents the value of expected future earnings and cash flows, as well as the synergies created by the integration of the new business within our organization, including cross-selling opportunities to help strengthen our existing service offerings and expand our market position. The goodwill and intangibles related to the acquisition are expected to be deductible for tax purposes. The following table summarizes our preliminary purchase price allocation at the acquisition closing date, net of cash acquired:
Net tangible assets: |
Accounts receivable | $ | 73,549 |
Contract assets | 38,775 |
Other current assets | 25,862 |
Property and equipment, net | 15,363 |
Other non-current assets, net | 26,243 |
Accounts payable | (45,460) |
Contract liabilities | (51,698) |
Current portion of long-term lease obligations | (3,860) |
Other current and non-current liabilities | (49,895) |
Total net tangible assets | 28,879 |
Identifiable intangible assets | 227,700 |
Goodwill | 304,199 |
Total fair value of consideration transferred | $ | 560,778 |
The purchase price allocation for the CEC Acquisition is preliminary. Amounts provisionally assigned to working capital, identifiable intangible assets, and certain other assets and liabilities are subject to change as we complete our valuation procedures. We expect to finalize the allocation as soon as practicable within the measurement period, which will not exceed one year from the acquisition date. Measurement‑period adjustments, if any, will be recorded in the period they are identified and may affect the amounts recognized for assets acquired, liabilities assumed, goodwill, and the intangible amortization in our results of operations. Identifiable Intangible Assets—Intangible assets identified as part of the CEC Acquisition are reflected in the table below and are recorded at their estimated fair value, as determined by the Company’s management, based on available information which includes a preliminary valuation from external experts. The estimated useful lives for intangible assets were determined based upon the remaining useful economic lives of the intangible assets that are expected to contribute directly or indirectly to future cash flows.
| Weighted Average Life (Years) |  | September 1, 2025 Fair Value
Customer relationships | 25 |  | $ | 156,200 |
Trade names | 25 |  | 71,500 |
Total |  |  | $ | 227,700 |
Supplemental Pro Forma Information (Unaudited)—The following unaudited pro forma combined financial information (“the pro forma financial information”) gives effect to the CEC Acquisition and related events as if they occurred at the beginning of the earliest comparative period and includes adjustments to (1) include additional intangible asset amortization associated with the CEC Acquisition (approximately $9,100 annually), (2) include tax and interest income impacts, and (3) include the pro forma results of CEC for the periods ended September 30, 2025 and 2024, respectively. Additionally, the supplemental pro forma earnings were adjusted to exclude approximately $2,700 and $5,400 of nonrecurring acquisition related costs incurred during the three and nine months ended September 30, 2025, respectively, and adjusted the nine months ended September 30, 2024 to include the $5,400 of acquisition related costs. This pro forma financial information has been presented for illustrative purposes only and is not necessarily indicative of the operating results that would have been achieved had the pro forma events taken place on the dates indicated. Further, the pro forma financial information does not purport to project the future operating results of the combined company following the CEC Acquisition.
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2025 |  | 2024 |  | 2025 |  | 2024
Pro forma revenue | $ | 752,684 |  |  | $ | 684,971 |  |  | $ | 1,985,517 |  |  | $ | 1,852,060 |
Pro forma net income attributable to Sterling common stockholders | $ | 87,206 |  |  | $ | 62,755 |  |  | $ | 207,187 |  |  | $ | 144,885 |
From the acquisition date of September 1, 2025 through September 30, 2025, revenue associated with the CEC Acquisition totaled approximately $41,400 and its pre-tax income was approximately $4,100. Drake Acquisition—During the first quarter of 2025, Sterling acquired Drake Concrete, LLC (“Drake”) (the “Drake Acquisition”). Drake provides concrete slabs for residential home builders in the Dallas-Fort Worth market. The purchase price was $25,000 in cash plus a four year earn-out opportunity. The Drake Acquisition is accounted for using the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations. The results of Drake since the date of acquisition are included in our Building Solutions segment.

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