Sterling Construction Company Completes Acquisition of Tealstone Construction and Replaces Existing Credit Facility
April 03 2017 - 4:05PM
Business Wire
Sterling Construction Company, Inc. (NasdaqGS:STRL) (“Sterling”
or the "Company”) today announced that it has completed the
previously announced acquisition of Tealstone Construction
(“Tealstone”), a leading Texas-based concrete construction company,
for approximately $85 million. The Company also announced that it
has replaced its existing asset-based loan and security agreement
with a new, $85 million credit facility, of which $55 million will
be used to partially finance the acquisition of Tealstone.
Tealstone is a market leader in commercial and residential
concrete construction in the Dallas-Fort Worth Metroplex. It serves
commercial contractors and multi-family developers, as well as
national homebuilders in Texas and Oklahoma. Tealstone will
continue to operate as a separate subsidiary under the Tealstone
name. Tealstone’s co-founders, Gary Engasser and Billy Wolf, will
remain with the Company. Tealstone was represented by Glaucon
Capital Partners, L.L.C. based out of the Dallas-Fort Worth
area.
Joe Cutillo, Sterling’s President, stated, “We are excited about
this transaction on many different levels. We view the acquisition
of Tealstone as the next step in transforming the Company. In
addition to its revenue and income, it is key to advancing our
strategy of expanding into adjacent markets. The strong talent of
the Tealstone management team and the relationships they have
established with their customers will allow for growth
opportunities with their existing customers into our other markets.
Tealstone’s expertise also allows for further expansion of our
commercial projects in the Texas market, the ability to lever
commercial business with our airport efforts while also allowing
for further diversification into the private sector. We worked hard
to close this transaction in a timely manner, and will now move
quickly to realize the true potential of Tealstone as a part of the
Sterling team. We intend to update our previous guidance to
incorporate Tealstone when we announce our first quarter results in
early May. Based on the timing of the transaction, we intend to
incorporate 8 months of operating results in our full year
consolidated results.”
Credit Facility
Separately, the Company entered into a Loan and Security
Agreement with the Strategic Credit Group at Oaktree Capital that
provides Sterling with a five-year, $85 million senior secured term
loan that replaces the Company’s existing $40 million asset-based
facility. Annual interest on the new facility will be LIBOR plus
8.75%. TCB Capital Markets acted as exclusive financial advisor to
the Company in connection with the new credit facility.
“We are appreciative of the support and confidence shown by
Oaktree,” stated Ronald Ballschmiede, CFO of Sterling. “This new
credit facility allows us to fund the transformative Tealstone
acquisition, while also providing Sterling with a strong financial
foundation to execute on our long-term strategic plan.”
Sterling is a leading heavy civil construction company that
specializes in the building and reconstruction of transportation
and water infrastructure projects in Texas, Utah, Nevada, Colorado,
Arizona, California, Hawaii, and other states in which there are
construction opportunities. Its transportation infrastructure
projects include highways, roads, bridges, airfields, ports and
light rail. Its water infrastructure projects include water,
wastewater and storm drainage systems.
This press release includes certain statements that fall within
the definition of “forward-looking statements” under the Private
Securities Litigation Reform Act of 1995. Any such statements are
subject to risks and uncertainties, including overall economic and
market conditions, federal, state and local government funding,
competitors’ and customers’ actions, and weather conditions, which
could cause actual results to differ materially from those
anticipated, including those risks identified in the Company’s
filings with the Securities and Exchange Commission. Accordingly,
such statements should be considered in light of these risks. Any
prediction by the Company is only a statement of management’s
belief at the time the prediction is made. There can be no
assurance that any prediction once made will continue thereafter to
reflect management’s belief, and the Company does not undertake to
update publicly its predictions or to make voluntary additional
disclosures of nonpublic information, whether as a result of new
information, future events or otherwise.
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version on businesswire.com: http://www.businesswire.com/news/home/20170403006200/en/
Sterling Construction Company, Inc.Jennifer Maxwell, Director of
Investor Relations281-951-3560orInvestor Relations
Counsel:The Equity Group Inc.Fred Buonocore, CFA
212-836-9607Kevin Towle 212-836-9620
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