Back to top

Image: Bigstock

Construction Partners (ROAD) Concludes King Asphalt Buyout

Read MoreHide Full Article

Construction Partners, Inc. (ROAD - Free Report) has scooped up a Liberty, SC-based full-service hot-mix asphalt and paving company — King Asphalt, Inc. The financial terms of the transaction are not yet disclosed.

King operates three hot-mix asphalt plants in the Greenville, South Carolina metro area. It provides asphalt contracting services to various public, commercial and residential projects.

In this regard, Fred J. (Jule) Smith, III, president and chief executive officer of Construction Partners, said, “While we have worked in South Carolina for many years, we are excited to now have a platform company with three hot-mix asphalt plants, skilled crews and an experienced management team to lead future expansion in the state."

Construction Partners’ Diligent Inorganic Drive

This vertically integrated civil infrastructure company remains focused on systematic acquisitions to expand market share across its footprint. On Sep 10, the company acquired C.K. Earnhardt & Son, Incorporated, thereby adding a hot-mix asphalt plant, personnel, and equipment in the greater Charlotte metropolitan area. This buyout further expanded its geographic footprint within North Carolina, a state with solid potential for persistent growth in light of favorable demographic trends.

Meanwhile, in early August, the company announced two significant buyouts, thereby expanding its geographic footprint in the Southeast, and further enhancing vertical integration in Alabama and North Carolina. These acquisitions totaled approximately $113 million, and added four hot-mix asphalt plants as well as five aggregate facilities. In Alabama, it acquired Good Hope Contracting and its related entities, all headquartered in Cullman. In addition to hot-mix asphalt plants and aggregate facilities, the transaction also included a diverse fleet of trucks and construction equipment. These assets will help support, and grow its operations in Central and Northern Alabama.

Zacks Investment ResearchImage Source: Zacks Investment Research

Coming to price performance, the company’s shares have rallied 77.4% over the past year compared with the industry’s 16.4% growth. The solid price appreciation was mainly driven by strategic buyouts and strong demand.

Zacks Rank & Key Picks

Construction Partners currently carries a Zacks Rank #5 (Strong Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some better-ranked stocks in the same space include Caesarstone Ltd. (CSTE - Free Report) , Frontdoor Inc. (FTDR - Free Report) and James Hardie Industries PLC (JHX - Free Report) . While Caesarstone currently sports a Zacks Rank #1, the other two stocks carry a Zacks Rank #2 (Buy).

Caesarstone, Frontdoor, and James Hardie’s earnings are likely to increase 114.6%, 11.6%, and 30.1%, respectively, this year.