ConDig (14-Aug-19). Texas-based civil contractor Sterling Construction Co is set to acquire Austell, Georgia-based specialty contractor Plateau Excavation, Inc in a deal worth $400 million.
Sterling said the transaction, which will be funded by a term loan, was expected to close near the end of the third quarter of this year
Plateau is a large-scale site infrastructure improvement contractor and the largest excavating contractor in the Southeastern US, with reported full-year 2018 revenues at about $290 million and approximately 800 employees.
Sterling said the acquisition provides it with diversification of revenue streams, a broad range of high-quality customers in rapidly growing end markets and increases profitability and cash flow.
“Sterling’s acquisition of Plateau aligns directly with our strategic growth plan as it meets our key criteria of expansion into adjacent markets, diversification of revenue sources and customer base, and enhancement of our overall margin mix while reducing our risk,” said Joe Cutillo, Sterling’s chief executive officer.
“Plateau is a transformational acquisition in that it not only complements our core heavy civil construction and commercial concrete businesses, but also gives Sterling access to new geographies and rapidly growing end markets. Given the similarities in project execution experience and capabilities, and the opportunity to leverage both our existing fleet of equipment and current geographic footprint, we are highly enthusiastic about Plateau’s ability to drive increased value for our shareholders.”
Excluding transaction related costs, Sterling said the acquisition was expected to be accretive to earnings and generate free cash flow in the fourth quarter of this year.
In May, a subsidiary of Sterling Construction landed a $33 million contract to revamp an eight mile stretch of Texas State Highway 34 near Kaufman, Texas