Sterling Infrastructure, Inc. (NASDAQ: STRL) shares experienced a notable surge of 4.20%, reaching $67.68, in the after-market session this Wednesday. The stock’s performance during the regular session also demonstrated a positive trend, concluding with a 1.00% increase at $64.95. This uptick in STRL stock value followed a strategic acquisition move.
In a recent development, Sterling Infrastructure (STRL) successfully acquired Professional Plumbers Group, Incorporated (PPG), headquartered in Wylie, Texas. PPG, a provider of plumbing services to residential home builders in the greater Dallas area, will integrate into Sterling Infrastructure’s Building Solutions segment.
The acquisition transaction involved a cash payment of $50 million, supplemented by an earnout opportunity linked to the achievement of future EBITDA targets. Anticipated to contribute annual revenue in the range of $50 to $55 million to STRL, PPG was strategically chosen for its robust and accretive margin profile. The distinctive outsourced labor model of PPG will be seamlessly incorporated into the operations of STRL.
PPG’s specialization in handling major plumbing phases for new residential constructions complements Sterling’s suite of residential services in the Dallas market, particularly in the crucial post-slab completion phase. This strategic move not only expands STRL’s service portfolio but also provides access to a complementary customer base, creating opportunities for cross-selling services.
Renowned as a premier plumbing services provider in one of the nation’s top residential markets, PPG boasts strong customer relationships, a track record of stellar execution, and profitability. With this acquisition, Sterling Infrastructure enhances not only its service offerings and customer outreach but also positions itself as a comprehensive provider of concrete slab and plumbing services for residential builders.
Furthermore, Sterling Infrastructure announced noteworthy Transportation Solutions awards exceeding $470 million in the third quarter of 2023, contributing to a record consolidated backlog at the quarter’s conclusion.
The Transportation Solutions segment continues to experience robust activity, driven by heightened state funding levels and the favorable impacts of the Infrastructure Investment and Jobs Act. This strong demand environment allows STRL to be discerning in project selection, fostering margin expansion efforts while concurrently mitigating execution risks.
