Dycom Strengthens Position With $1.63B Power Solutions Acquisition

Dycom Industries Inc. DY has completed its previously announced acquisition of Power Solutions, LLC, a leading Mid-Atlantic electrical contractor serving data centers, for approximately $1.63 billion in cash and about 1.0 million shares of Dycom common stock. The transaction was announced on Nov. 19, 2025. The company has also updated its existing credit agreement to support the transaction.

Power Solutions positions Dycom at the center of accelerating demand for digital infrastructure. The acquisition combines Power Solutions’ leadership in electrical infrastructure with Dycom’s scale and fiber expertise, strengthening the company’s ability to capitalize on powerful secular growth trends in digital infrastructure services.

Following the news, shares of DY gained 0.6% in after-hours trading yesterday.

DY’s Financially Accretive Transaction

This transaction creates meaningful financial value for DY and is expected to be immediately accretive to adjusted EBITDA margins and adjusted diluted earnings per share (EPS), while improving free cash flow. DY’s long-term financial discipline remains intact, and the combined company is expected to reduce net leverage to around 2x within 12 to 18 months. The acquisition further diversifies services by adding Power Solutions’ electrical contracting capabilities, supports cross-selling across digital infrastructure markets, and expands execution capacity with more than 2,800 skilled employees.

Power Solutions is a leading provider of mission-critical electrical infrastructure for data centers and other essential industries in the Washington, D.C.–Maryland–Virginia (DMV) region, the world’s largest data center market. The company is a strong financial fit, with a 15% four-year revenue CAGR, EBITDA margins in the mid- to high teens and expected 2025 revenue of about $1 billion. The business is high quality, immediately accretive, and supported by a backlog exceeding $1 billion in the DMV region.

DY’s Inorganic Efforts

As demonstrated by its recent acquisitions, strategic M&A remains a key pillar of Dycom’s growth strategy, complementing organic growth while expanding the company’s reach into new markets and product categories. During the third-quarter earnings call, management emphasized Dycom’s long-standing acquisition strategy, supported by a well-established integration model that enables seamless onboarding of acquired businesses. This approach preserves the culture and local leadership of acquired companies while leveraging Dycom’s scale, financial strength, and operational expertise.

Dycom has a strong track record of successful integrations. Most recently, the company completed the acquisition of Black & Veatch’s public-carrier wireless infrastructure business in fiscal 2025, strengthening its wireless construction capabilities and expanding its footprint in several high-demand markets.

DY’s Share Price Performance

DY stock has gained 27% in the past three months, outperforming the Zacks Building Products - Heavy Construction industry’s 6.9% rise. 

The company remains confident in its long-term growth prospects, supported by sustained demand for fiber infrastructure, robust activity from long-standing carrier partners, and accelerating demand from leading hyperscalers that continues to drive cost efficiencies and margin expansion. However, seasonality risks and tariff-related uncertainties may pose risks to project costs and planning in the upcoming period.

DY’s Zacks Rank & Other Key Picks

Currently, Dycom sports a Zacks Rank #1 (Strong Buy).

Some other top-ranked stocks from the Construction sector are:

Everus Construction Group ECG presently sports a Zacks Rank #1. The company delivered a trailing four-quarter earnings surprise of 51.8%, on average. ECG stock has soared 45.7% in the past six months. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for ECG’s 2026 sales and EPS indicates growth of 7.4% and 5.7%, respectively, from the year-ago period’s levels.
 
Sterling Infrastructure, Inc. STRL flaunts a Zacks Rank of 1 at present. The company delivered a trailing four-quarter earnings surprise of 14%, on average. Sterling Infrastructure stock has rallied 40.7% in the past six months.

The Zacks Consensus Estimate for STRL’s 2026 sales and EPS indicates growth of 19.1% and 14.6%, respectively, from the prior-year levels.

Great Lakes Dredge & Dock GLDD sports a Zacks Rank of 1 at present. The company delivered a trailing four-quarter earnings surprise of 65.5%, on average. Great Lakes Dredge & Dock stock has gained 11.6% in the past six months.

The Zacks Consensus Estimate for GLDD’s 2026 sales indicates growth of 4.8%, while EPS indicates a decline of 0.2% from the prior-year levels.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research