Sterling Construction plans $475 million credit facilities

By Sara Rosenberg

New York, Aug. 14 – Sterling Construction Co. Inc. has received a commitment for $475 million of credit facilities to help fund its acquisition of Plateau Excavation Inc. and repay an existing higher interest rate term loan, according to an 8-K filed with the Securities and Exchange Commission on Wednesday.

The new credit facilities consist of a $75 million revolver and a $400 million five-year term loan.

BMO Capital Markets is the lead arranger on the debt.

Under the agreement, Plateau Excavation, an Austell, Ga.-based specialty contractor, is being purchased for $375 million in cash and $25 million in Sterling Construction common stock and seller notes.

Other funds for the transaction will come from the company’s available cash balance.

Closing is expected near the end of the third quarter, subject to customary conditions and regulatory approvals.

Pro forma for the transaction as of June 30, Sterling Construction’s secured debt-to-combined EBITDA ratio would be about 3.1x.

Sterling Construction is a The Woodlands, Tex.-based construction company that specializes in heavy civil infrastructure construction and infrastructure rehabilitation as well as residential construction projects.

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