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Construction Partners (ROAD) Acquires Paving Firm in NC

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Construction Partners, Inc. (ROAD - Free Report) or CPI acquired Albemarle, NC-based paving contractor — C.K. Earnhardt & Son, Incorporated. With this buyout, it added a hot-mix asphalt plant, personnel and equipment in the greater Charlotte metropolitan area.

CPI's president and chief executive officer, Fred J. (Jule) Smith, III, stated, "Today's transaction represents a further expansion of our geographic footprint within North Carolina, a state that we believe has tremendous potential for continued growth in light of favorable demographic trends and a healthy infrastructure funding program. In particular, with a plant in Albemarle, we expect to be able to participate in the ongoing eastward development of the Charlotte metro area."

Strategic Acquisitions to Drive Top-Line Performance

CPI is a vertically integrated civil infrastructure company that constructs and maintains roadways across five southeastern states. The company focuses on acquisition growth strategy, particularly in the hot mix asphalt paving and construction industry.

On Aug 3, CPI acquired Good Hope Contracting Co., Inc. and related entities, situated in Cullman, AL, as well as Daurity Springs Quarry — a crushed stone and aggregates facility located near Goldston, NC. On Jun 23, CPI has acquired a Wilson-based grading and sitework contractor — PLT Construction Company, Inc.

During the fiscal first quarter, a subsidiary of CPI purchased four hot mix asphalt or HMA production and paving companies located in North Carolina. In the first six months of fiscal 2021, it acquired a total of 13 HMA plants and more than 300 employees.

Since inception through fiscal 2020, CPI acquired and integrated 23 complementary businesses, which have contributed significantly to its growth.

Zacks Investment Research
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Coming to price performance, the company’s shares have rallied 87.1% compared with the industry’s 30.4% growth in the past year. The solid price appreciation was mainly driven by the company’s strategic buyouts and strong demand.

Zacks Rank & Key Picks

Construction Partners currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some other top-ranked stocks in the same space include Armstrong World Industries, Inc. (AWI - Free Report) , Masco Corporation (MAS - Free Report) and Otis Worldwide Corporation (OTIS - Free Report) , each carrying a Zacks Rank #2 (Buy). All the three companies’ earnings are likely to increase 16.3%, 18.6% and 17.9%, respectively, in 2021.