Construction Partners is acquiring the Texas asphalt and paving company

Dothan-based Construction Partners Inc. is acquiring Asphalt Inc., which does business as Lone Star Paving, in a deal worth $654 million in cash and 3 million shares. Lone Star Paving is based in Austin, Texas.

Lone Star is an asphalt manufacturing and paving company operating in Central Texas with ten hot mix asphalt plants, four aggregate plants and one liquid asphalt terminal to support its operations.

“We are pleased to announce this transformative acquisition, adding a preeminent platform company as we enter our seventh state. Lone Star is a market leader in several high-growth metropolitan areas in Central Texas, with a highly experienced and effective management team and a culture of operational excellence,” said Fred J. (Jule) Smith III, President and CEO of CPI.

The acquisition is consistent with CPI’s decade-long growth strategy of entering new states through the acquisition of a platform company with an experienced and local management team and a well-established reputation, the company said. With this acquisition, CPI expands its geographic footprint to include the Austin, San Antonio and Temple-Killeen metropolitan areas of Texas.

“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 have strong cultural alignment and we are excited about the growth opportunities presented to both companies.”

Under the terms of the agreement, CPI will acquire all of Lone Star’s outstanding member units for $654 million in cash and 3 million shares of CPI’s Class A common stock. In addition, CPI will pay Lone Star Sellers in four quarterly installments upon closing and purchase from Sellers upon receipt of cash equal to the working capital remaining at Closing in Lone Star (subject to certain adjustments to certain government claims, a company that certain). Real estate for $30 million in cash. CPI expects to finance the cash portion of the purchase price with proceeds from debt financing. The transaction is expected to close in the first quarter of fiscal 2025 (fourth calendar quarter of calendar 2024), subject to certain regulatory approvals.

Wells Fargo Securities LLC acted as exclusive financial advisor to Lone Star and ArentFox Schiff LLP acted as legal advisor on the transaction. Haynes and Boone LLP served as legal counsel to CPI.