Dothan-based Construction Partners Inc. is acquiring Asphalt Inc., which does business as Lone Star Paving, in a $654 million cash and 3 million shares agreement. Lone Star Paving is based in Austin, Texas.
Lone Star is an asphalt manufacturing and paving company operating in central Texas, with 10 hot-mix asphalt plants, four aggregate facilities and one liquid asphalt terminal supporting its operations.
“We are excited to announce this transformational acquisition to add an outstanding platform company as we enter our seventh state. Lone Star is a market leader across multiple high-growth metropolitan areas in central Texas, with a deeply experienced and effective management team and a culture of operational excellence,” said CPI President and CEO Fred J. (Jule) Smith III.
The acquisition is consistent with CPI’s decades-long growth strategy to enter new states through the acquisition of a platform company with an experienced and local management team and well-established reputation, the company said. Through this acquisition, CPI adds the Texas metropolitan areas of Austin, San Antonio and Temple-Killeen to its geographic footprint.
“We look forward to joining the CPI team and expanding the Texas platform,” said Jack Wheeler, founder and CEO of Lone Star. “CPI and Lone Star share a strong cultural alignment, and we are eager for the growth opportunities available to both companies.”
In the agreement, CPI will acquire all of the outstanding membership units of Lone Star for $654 million in cash and 3 million 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 (subject to certain adjustments) in four quarterly installments following the closing and purchase from the sellers, upon receipt of specified government entitlements, an entity holding certain real property for $30 million in cash. CPI expects to finance the cash portion of the purchase price with proceeds of debt financing. The transaction is expected to close in the first quarter of 2025 fiscal year (fourth calendar quarter of calendar 2024), subject to certain regulatory approvals.
Wells Fargo Securities LLC served as the exclusive financial advisor to Lone Star on the transaction, and ArentFox Schiff LLP served as its legal advisor. Haynes and Boone LLP served as legal advisor to CPI.
