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Construction Partners (ROAD) Acquires PLT, Boosts Presence

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In a bid to enhance the vertical integration of construction services in eastern North Carolina, Construction Partners, Inc. ROAD or CPI has acquired a Wilson-based grading and sitework contractor — PLT Construction Company, Inc.

As an experienced public roadway and sitework contractor, PLT Construction serves many of the markets acquired by CPI in first-quarter fiscal 2021. In addition to the recent acquisition, CPI added much-needed construction equipment to drive organic growth in these new markets in eastern North Carolina.

CPI's President and Chief Executive Officer, Fred J. (Jule) Smith, III, said, "For several years, the team at PLT Construction Company has been successful partnering with the Rose Brothers organization we acquired last October on a variety of projects, and now, we will have the opportunity to continue their shared legacy of high-quality work in this part of the state as a single, unified organization."

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.

During the fiscal first quarter, a subsidiary of CPI purchased four hot mix asphalt or HMA production and paving companies located in North Carolina. On Oct 8, 2020, it acquired a business located in Carthage; on Oct 30, it bought Ahoskie-based HMA company; on Dec 3, it purchased a Raleigh-based HMA business; and on Dec 18, it snapped up a company engaged in HMA in Kitty Hawk. The acquired businesses added thirteen HMA plants in central and eastern North Carolina, providing CPI with access to additional markets and expanding its footprint in the state. 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 have acquired and integrated 23 complementary businesses, which have contributed significantly to its growth.

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Coming to price performance, the company’s shares have rallied 14.3%, outperforming the industry’s 4.4% growth in the past three months. The solid price appreciation was mainly driven by the company’s strategic buyouts and strong demand.

Zacks Rank

Construction Partners — which shares space with Advanced Drainage Systems, Inc. WMS, Quanex Building Products Corporation NX and TopBuild Corp. BLD in the same space — currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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