This audio is automatically generated. Please let us know if you have any comments.
Civil builder Construction Partners has signed an agreement for acquire Lone Star Paving for $654 million in cash and 3 million shares, the Dothan, Ala.-based infrastructure company announced Oct. 21.
Lone Star, headquartered in Austin, Texas, is a vertically integrated asphalt manufacturing and paving company operating in the high-growth markets of Central Texas, with 10 hot mix asphalt plants, four facilities of aggregates and a liquid asphalt terminal, according to the press release. The acquisition will be immediately accretive to earnings upon closing and is expected to generate an annualized revenue contribution of $530 million in fiscal 2025.
Lone Star provides asphalt construction and related transportation services to public and commercial customers primarily in the Austin, San Antonio and Temple-Killeen metropolitan areas, three of the nation’s fastest-growing markets, according to the release.
“We are excited to announce this transformational acquisition to add an exceptional platform company as we enter our seventh state,” Construction Partners President and CEO Fred J. Smith III said in the statement. “Lone Star is a market leader in multiple high-growth metro areas in Central Texas, with an effective and deeply experienced management team and a culture of operational excellence.”
Construction Partners’ acquisition of Lone Star aligns with its established growth strategy of entering new states by purchasing a platform company with an experienced local management team, reputation for quality and opportunities for growth, according to the statement.
Analysts at Baird Equity Research’s industrial services team also praised the move.
“We like it [Construction Partners’] acquisition of Lone Star Paving (LSP), the largest in the company’s history, and its entry into the large and growing Texas markets,” they said in an Oct. 21 investor note.
