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Sterling Announces Strategic Divestiture of its 50% Stake in Myers & Sons Construction
THE WOODLANDS, Texas--(BUSINESS WIRE)-- On November 30, 2022, Sterling Infrastructure, Inc. (NasdaqGS: STRL) (“Sterling” or the “Company”) entered into an
About this update from Sterling Infrastructure, Inc.
[{"type":"text","content":" THE WOODLANDS, Texas--(BUSINESS WIRE)--\nOn November 30, 2022, Sterling Infrastructure, Inc. (NasdaqGS: STRL) (“Sterling” or the “Company”) entered into an agreement (the “Agreement”) and sold the Company’s 50% ownership interest in its partnership with Myers & Sons Construction L.P. (“Myers”) for $18 million in cash. In accordance with the Agreement’s payment terms, the Company is to receive $12 million by early 2023 and a series of three $2 million payments due by various dates in 2023, 2025, and 2027. The divestiture is consistent with the Company’s strategy of reducing its portfolio of low-bid heavy highway projects in order to increase the Company’s margins and of focusing on its strategic geographies.\n\nPrior to the divestiture, the Company fully consolidated Myers in its financials as a result of provisions within the Myers operating agreement. Myers results, including 50% of earnings and losses related to members’ interest of the consolidated 50% owned subsidiary and other related direct costs, that were included within the Company’s consolidated financials for the nine months ended September 30, 2022 and full year ended December 31, 2021, respectively, were:\n\n\nRevenue of $157.0 million and $167.4 million;\n\n\nGross profit of $0.9 million and $11.2 million;\n\n\nOperating (loss) gain of $(6.1) million and $0.3 million; and\n\n\nNet (loss) gain of $(2.0) million and $0.5 million.\n\n\nThe Company expects to present the operating results of Myers as discontinued operations in the fourth quarter of 2022 and anticipates recognizing an after-tax gain of $11 to $13 million on the disposition, primarily due to an extinguishment of a $15 million liability for members’ interest subject to mandatory redemption, partly offset by a $2 to $4 million loss on the sale of the Company’s 50% ownership interest.\n\nCEO Remarks\n\n“This transaction enables us to continue advancing in areas aligned with our strategic vision,” stated Joe Cutillo, Sterling’s Chief Executive Officer. “Myers operations are largely outside our primary areas of focus with respect to project type and geography. The proceeds from this divestiture further enhance our future investment in strategic growth areas.”\n\nAbout Sterling\n\nSterling operates through a variety of subsidiaries within three segments specializing in E-Infrastructure, Transportation and Bui...