Construction Partners buys Florida site contractor Cline as roll-ups continue

Construction Partners, Inc. (NASDAQ: ROAD) has acquired S.E. Cline Construction, a commercial site development and underground utility contractor based in Palm Coast, Florida, the company announced on 19 October. Financial terms weren't disclosed.

What CPI is getting

Cline brings about 60 employees and works across northeast and central Florida. The deal also includes a rail-served, permitted hot-mix asphalt plant site in Bunnell, Florida. The business will be folded into C.W. Roberts Contracting (CWR), CPI's Florida platform company.

For a road builder, the plant site may matter as much as the crews. A permitted, rail-served asphalt site gives CPI a base for supplying its own paving work in the area.

"an attractive opportunity for future vertical integration and organic growth" Fred J. (Jule) Smith III, President and CEO, Construction Partners

Smith also said the deal builds on CPI's purchase of P&S Paving in Daytona Beach last year and strengthens CWR along Florida's I-95 corridor, according to Investing.com. CPI operates in Alabama, Florida, Georgia, North Carolina, Oklahoma, South Carolina, Tennessee and Texas, and most of its work comes from publicly funded projects.

Two Florida deals in a week

The Cline deal follows a much bigger Florida move by another listed heavy civil contractor. On 13 October, Raleigh-based Cardinal Infrastructure Group (Nasdaq: CDNL) agreed to buy Hughes Brothers Construction of Wildwood, Florida for $357.5 million, rising to as much as $455 million with performance-based payments, ENR reported. Hughes Brothers has more than 500 employees, more than $220 million in trailing 12-month revenue, a backlog of about $350 million and about 25 full-time underground utility pipe crews. That deal is expected to close in the fourth quarter.

The bigger picture

The two deals are very different in size, but the logic is similar. Both buyers are adding site development and underground utility capacity in Florida, and both are buying established local teams rather than building from scratch. For listed contractors, buying a regional firm is often the quickest way to add crews, equipment and local relationships in a growing state. For owner-founders of mid-sized site and utility firms, there's a clear exit route, and the Hughes Brothers founders are staying on in leadership roles after their sale.