v3.26.3
ACQUISITIONS (Tables)
 9 Months Ended
Sep. 30, 2026
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
Schedule of Fair Value Consideration Transferred
The following table details the components of purchase consideration for the acquisitions.
(In thousands)Stone RidgeCEC
Cash consideration$139,985 $442,937 
Equity consideration27,406 79,458 
Earn-out consideration (1)
9,800 39,194 
Working capital adjustment941 — 
Total fair value of consideration transferred$178,132 $561,589 
(1) The Stone Ridge earn-out arrangement requires the Company to pay up to $15 million based upon Stone Ridge’s achievement of a certain EBITDA target. The CEC earn-out arrangement requires the Company to pay up to $80 million based upon CEC’s achievement of certain operating income targets.
Schedule of Purchase Price Allocation
The following table summarizes our purchase price allocations at the acquisition closing dates, net of cash acquired:
(In thousands)Stone RidgeCEC
Accounts receivable$27,148 $73,549 
Contract assets5,376 40,632 
Other current assets819 20,117 
Property and equipment, net8,288 15,363 
Other non-current assets, net1,496 25,820 
Accounts payable(7,188)(45,460)
Contract liabilities(4,979)(53,555)
Current portion of long-term lease obligations(228)(3,860)
Other current and non-current liabilities(3,611)(47,673)
Total net tangible assets27,121 24,933 
Identifiable intangible assets120,700 227,800 
Goodwill30,311 308,856 
Total fair value of net assets acquired$178,132 $561,589 
Schedule of Identifiable Intangible Assets Acquired The estimated useful lives for intangible assets were determined based upon the remaining useful economic lives of the intangible assets that are expected to contribute directly or indirectly to future cash flows.
(In thousands, except life data)Weighted Average Life (Years)June 1, 2026
Fair Value
Customer relationships (1)
25$110,000 
Trade names (2)
2510,700 
Total$120,700 
(1) The customer relationships intangible asset was valued using the multi‑period excess earnings method (“MPEEM”), an income‑based approach. This method estimates the present value of the future cash flows attributable to existing customers with consideration given to estimated customer attrition rates. Significant assumptions used in the valuation included projected revenues, operating margins, a customer attrition rate of 5%, and a discount rate reflecting the risk inherent in the projected cash flows of 22%.
(2) The trade names intangible asset was valued using the relief‑from‑royalty method. Significant assumptions used in the valuation included projected revenues, an estimated royalty rate of 1%, and a discount rate of 22%.
The estimated useful lives for intangible assets were determined based upon the remaining useful economic lives of the intangible assets that are expected to contribute directly or indirectly to future cash flows.
(In thousands, except life data)Weighted Average Life (Years)September 1, 2025
Fair Value
Customer relationships (1)
25$156,300 
Trade names (2)
2571,500 
Total$227,800 
(1) The customer relationships intangible asset was valued using the MPEEM, an income‑based approach. This method estimates the present value of the future cash flows attributable to existing customers with consideration given to estimated customer attrition rates. Significant assumptions used in the valuation included projected revenues, operating margins, a customer attrition rate of 10%, and a discount rate reflecting the risk inherent in the projected cash flows of 13.5%.
(2) The trade names intangible asset was valued using the relief‑from‑royalty method. Significant assumptions used in the valuation included projected revenues, an estimated royalty rate of 1.5%, and a discount rate of 12.5%.
Schedule of Proforma Information This pro forma financial information has been presented for illustrative purposes only and is not necessarily indicative of the operating results that would have been achieved had the pro forma events taken place on the dates indicated. Further, the pro forma financial information does not purport to project the future operating results of the combined company following the acquisitions.
Three Months Ended September 30,Nine Months Ended September 30,
(In thousands)2026202520262025
Pro forma revenue$1,563,927 $804,368 $3,625,913 $2,116,557 
Pro forma net income attributable to Sterling common stockholders$214,933 $90,766 $480,052 $208,691