Construction Partners to acquire Asphalt Inc. for $654M in cash, 3M shares

Construction Partners (ROAD) announced that it has entered into a definitive agreement to acquire Asphalt Inc. d/b/a Lone Star Paving, headquartered in Austin, Texas. Lone Star is a vertically integrated asphalt manufacturing and paving company operating in markets in central Texas, with 10 hot-mix asphalt plants, four aggregate facilities, and one liquid asphalt terminal supporting its operations. This acquisition will be immediately accretive to earnings upon closing and is anticipated to generate an annualized run-rate contribution of $530M of revenue and $120M of adjusted EBITDA in FY25. Under the terms of the definitive agreement, CPI will acquire all of the outstanding membership units of Lone Star for $654M in cash and 3M shares of CPI’s Class A common stock. In addition, CPI will pay cash to the sellers of Lone Star in an amount equal to the working capital remaining in Lone Star at the closing in four quarterly installments following the closing and purchase from the sellers of Lone Star, upon receipt of specified governmental entitlements, an entity holding certain real property for $30M in cash. CPI expects to finance the cash portion of the purchase price with the proceeds of debt financing. The transaction is expected to close in the first quarter of CPI’s 2025 fiscal year, subject to certain regulatory approvals and the satisfaction of other customary closing conditions.