Construction Partners Fuels Growth with $1.5B in Acquisitions, Targets $6B Revenue

TL;DR

**ROAD is paving its way to massive growth with aggressive M&A and government contracts, making it a strong long-term play despite acquisition risks.**

AI Summary

Construction Partners, Inc. (ROAD) reported a robust fiscal year 2025, driven by strategic acquisitions and strong public infrastructure spending. The company completed five acquisitions across four states, including Alabama, Tennessee, Texas, and Oklahoma, adding 27 HMA plants, four aggregate facilities, and a liquid asphalt terminal. These acquisitions totaled approximately $1.5 billion in consideration. Publicly funded projects, primarily from state DOTs, accounted for 65% of fiscal 2025 revenues, with DOT projects alone representing 43.4% of total revenues. The company also secured an $850.0 million Term Loan B in November 2024 and increased its Revolving Credit Facility to $500.0 million and its existing term loan to $600.0 million in June 2025, extending maturity to June 28, 2030. Post-fiscal year, ROAD acquired an additional eight HMA plants in Houston, Texas, and P&S Paving, LLC in Florida for approximately $262.1 million. The company also announced its "ROAD 2030" plan, targeting revenues exceeding $6 billion by fiscal year 2030.

Why It Matters

Construction Partners' aggressive acquisition strategy and ambitious 'ROAD 2030' plan signal significant expansion in the fragmented civil infrastructure market, particularly in the Sunbelt. This growth, fueled by the Infrastructure Investment and Jobs Act (IIJA) and state-level funding, positions ROAD to capitalize on sustained demand for road and bridge construction. For investors, this indicates potential for increased market share and revenue, but also higher debt levels and integration risks. Employees and customers in newly acquired regions will see continuity and potentially expanded services, while the broader market will observe a consolidating industry player, intensifying competition for smaller regional firms.

Risk Assessment

Risk Level: medium — The company's risk level is medium due to its substantial indebtedness, including an $850.0 million Term Loan B and a $600.0 million term loan, which could impact financial flexibility. Additionally, the aggressive acquisition strategy, with approximately $1.5 billion in fiscal 2025 acquisitions and an additional $262.1 million post-fiscal year, introduces integration risks and potential for overvaluation, as highlighted in the 'Risk Factors' section.

Analyst Insight

Investors should closely monitor Construction Partners' integration of its numerous acquisitions and its progress towards the 'ROAD 2030' revenue target of over $6 billion. While the company benefits from strong government infrastructure spending, assess the impact of rising interest rates on its substantial debt and its ability to maintain profitability amidst inflationary pressures on labor and materials.

Financial Highlights

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Revenue Breakdown

Key Numbers

• $6 billion — Targeted revenues by fiscal year 2030 (Part of the 'ROAD 2030' strategic plan)
• $1.5 billion — Aggregate transaction consideration for fiscal 2025 acquisitions (Expanded operations across four states)
• 27 — HMA plants added in fiscal 2025 acquisitions (Significant expansion of manufacturing capacity)
• $850.0 million — Principal amount of Term Loan B (Drawn on November 1, 2024, for acquisitions and debt repayment)
• $500.0 million — Increased Revolving Credit Facility (Increased from $400.0 million in June 2025)
• $600.0 million — Increased existing term loan (Increased from $400.0 million in June 2025)
• $262.1 million — Aggregate transaction consideration for acquisitions subsequent to fiscal 2025 year-end (Acquired eight HMA plants and P&S Paving, LLC in October 2025)
• 65% — Percentage of fiscal 2025 revenues from publicly funded projects (Highlights reliance on government contracts)
• 43.4% — Percentage of fiscal 2025 revenues from state DOTs (State DOTs are the largest customers)
• $3,385,566,578 — Aggregate market value of common equity held by non-affiliates (As of March 31, 2025)

Key Players & Entities

• Construction Partners, Inc. (company) — registrant
• Bank of America, N.A. (company) — administrative agent for Term Loan B
• PNC Bank, National Association (company) — administrative agent and lender for Term Loan A / Revolver Credit Agreement
• Vulcan Materials Company (company) — seller of eight HMA plants in Houston
• P&S Paving, LLC (company) — acquired HMA manufacturing and construction business
• Infrastructure Investment and Jobs Act (regulator) — federal funding driver for infrastructure spending
• Inflation Reduction Act of 2022 (regulator) — provided funding for surface transportation industry projects
• Lone Star Paving (company) — acquired entity

FAQ

Risk Factors

• Reliance on Government Contracts [high — market]: The company's significant reliance on publicly funded projects, particularly from state DOTs (65% of fiscal 2025 revenues), exposes it to risks associated with government budget allocations, procurement processes, and potential changes in infrastructure spending priorities. Fluctuations in government funding can directly impact revenue and project pipelines.
• Acquisition Integration and Debt Levels [high — financial]: The company has undertaken substantial acquisitions, including $1.5 billion in fiscal 2025 and $262.1 million post-year-end. Integrating these new operations and managing the associated debt, including an $850.0 million Term Loan B and increased credit facilities, presents financial and operational integration risks. Failure to effectively integrate could hinder expected synergies and strain financial resources.
• Supply Chain and Raw Material Availability [medium — operational]: The business relies on the availability and cost of key raw materials like aggregates and liquid asphalt for HMA production. Disruptions in the supply chain, price volatility of these commodities, or issues with mining and terminal operations could impact production costs and the ability to meet project demands.
• Environmental and Permitting Regulations [medium — regulatory]: As a civil infrastructure company involved in mining, manufacturing HMA, and construction, Construction Partners is subject to various environmental regulations and permitting requirements. Non-compliance or changes in environmental laws could lead to increased operating costs, project delays, or penalties.

Industry Context

The civil infrastructure sector, particularly road construction and maintenance, is heavily influenced by government spending on public projects. Companies like Construction Partners operate in a competitive landscape where scale, operational efficiency, and the ability to secure large government contracts are key differentiators. Trends include a focus on sustainable materials, technological advancements in construction, and consolidation driven by the need for greater capacity and expertise.

Regulatory Implications

Construction Partners faces significant regulatory oversight related to environmental standards, labor practices, and public contract procurement. Compliance with federal, state, and local regulations is crucial to avoid penalties, project delays, and reputational damage. Changes in environmental laws or procurement policies could impact operational costs and business opportunities.

What Investors Should Do

1. Monitor acquisition integration progress and synergy realization.
2. Assess the impact of government infrastructure spending on revenue.
3. Evaluate debt management and leverage ratios.
4. Track progress towards the 'ROAD 2030' revenue target.

Key Dates

• 2025-10-01: Announcement of 'ROAD 2030' strategic plan — Sets ambitious revenue targets of over $6 billion by fiscal year 2030, signaling a strong growth and expansion strategy.
• 2025-06-28: Increased Revolving Credit Facility and existing term loan — Enhanced liquidity and financial flexibility with a $500.0 million Revolving Credit Facility and a $600.0 million existing term loan, extending maturity to June 28, 2030.
• 2025-01-01: Fiscal year 2025 acquisitions completed — Five acquisitions across four states added 27 HMA plants and four aggregate facilities for approximately $1.5 billion, significantly expanding operational footprint.
• 2024-11-01: Entered into $850.0 million Term Loan B — Provided substantial financing for acquisitions and debt repayment, strengthening the company's capital structure.
• 2025-10-01: Acquisition of eight HMA plants in Houston and P&S Paving, LLC in Florida — Further expansion post-fiscal year-end for approximately $262.1 million, demonstrating continued aggressive growth strategy.

Glossary

HMA

Hot Mix Asphalt, a type of asphalt concrete used for paving roads. (It is a primary product manufactured and distributed by Construction Partners, Inc., forming a core part of their business operations and revenue.)

DOT

Department of Transportation, a government agency responsible for transportation infrastructure. (State DOTs are identified as the largest customers, accounting for 43.4% of Construction Partners' fiscal 2025 revenues, highlighting their critical importance.)

Vertical Integration

A strategy where a company owns or controls its suppliers, distributors, or retail locations to control its value chain. (Construction Partners emphasizes this strategy through its operations in HMA manufacturing, paving, site development, aggregate mining, and liquid asphalt distribution.)

Term Loan B

A type of term loan, often used in leveraged buyouts or for significant capital expenditures, typically with a longer maturity than other credit facilities. (The company secured an $850.0 million Term Loan B, indicating significant financing for strategic initiatives like acquisitions.)

Year-Over-Year Comparison

While specific comparative figures are not detailed in the provided text, the fiscal year 2025 appears to be a period of significant expansion for Construction Partners, Inc. The company completed substantial acquisitions totaling $1.5 billion, adding considerable HMA plant and aggregate facility capacity. This growth was supported by increased debt financing, including an $850.0 million Term Loan B and enhanced credit facilities. The company also launched its 'ROAD 2030' plan, indicating a strategic shift towards accelerated growth and higher revenue targets compared to previous periods.

Key Financial Figures

• $0.001 — stered Class A common stock, par value $0.001 ROAD The Nasdaq Stock Market LLC (Nasd
• $0 — ares of Class A common stock, par value $0.001, and 8,579,118 shares of Class B co
• $6 billion — uding, among others, revenues exceeding $6 billion by the end of fiscal year 2030. 2025 F
• $1.5 billion — or these acquisitions was approximately $1.5 billion. For further discussion regarding these
• $850.0 million — ity in an aggregate principal amount of $850.0 million (the "Term Loan B" and such credit agre
• $400.0 million — volving credit facility thereunder from $400.0 million to $500.0 million (the "Revolving Credi
• $500.0 million — ility thereunder from $400.0 million to $500.0 million (the "Revolving Credit Facility"), (ii)
• $600.0 m — loan thereunder from $400.0 million to $600.0 million, and (iii) extend the maturity da
• $262.1 million — or these acquisitions was approximately $262.1 million. For more information about these trans
• $400 billion — re funding programs and provided nearly $400 billion in new spending over five years for hig
• $3.0 b — mber 30, 2025, our contract backlog was $3.0 billion, compared to $2.0 billion at Sept
• $2.0 billion — t backlog was $3.0 billion, compared to $2.0 billion at September 30, 2024. Contract backlog
• $2.2 billion — er in progress or had not yet begun was $2.2 billion and $1.5 billion at September 30, 2025
• $0.8 billion — ecuted. Low bid/no contract backlog was $0.8 billion and $0.5 billion at September 30, 2025
• $0.5 billion — o contract backlog was $0.8 billion and $0.5 billion at September 30, 2025 and 2024, respect

Filing Documents

• road-20250930.htm (10-K) — 2286KB
• a202510-kxexhibit42.htm (EX-4.2) — 27KB
• a202510-kxexhibit211.htm (EX-21.1) — 16KB
• a202510-kxexhibit231.htm (EX-23.1) — 2KB
• a202510-kxexhibit311.htm (EX-31.1) — 14KB
• a202510-kxexhibit312.htm (EX-31.2) — 15KB
• a202510-kxexhibit321.htm (EX-32.1) — 6KB
• a202510-kxexhibit322.htm (EX-32.2) — 6KB
• a202510-kxexhibit951.htm (EX-95.1) — 65KB
• road-20250930_g1.jpg (GRAPHIC) — 110KB
• 0001628280-25-053871.txt ( ) — 14389KB
• road-20250930.xsd (EX-101.SCH) — 91KB
• road-20250930_cal.xml (EX-101.CAL) — 164KB
• road-20250930_def.xml (EX-101.DEF) — 485KB
• road-20250930_lab.xml (EX-101.LAB) — 1025KB
• road-20250930_pre.xml (EX-101.PRE) — 825KB
• road-20250930_htm.xml (XML) — 2313KB

Business

Business 3 Item1A.

Risk Factors

Risk Factors 8 Item 1B. Unresolved Staff Comments 22

C

Item 1 C . Cybersecurity 22 Item 2.

Properties

Properties 24 Item 3.

Legal Proceedings

Legal Proceedings 24 Item 4. Mine Safety Disclosures 24 PART II Item 5. Market for Registrant ' s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 25 Item 6. Reserved 26 Item 7. Management ' s Discussion and Analysis of Financial Condition and Results of Operations 27 Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 37 Item 8.

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data 38 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 84 Item 9A.

Controls and Procedures

Controls and Procedures 84 Item 9B. Other Information 84

C

Item 9 C . Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 84 PART III Item 10. Directors, Executive Officers and Corporate Governance 85 Item 11.

Executive Compensation

Executive Compensation 85 Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 85 Item 13. Certain Relationships and Related Transactions, and Director Independence 85 Item 14. Principal Account ant Fees and Services 85 PART IV Item 15. Exhibits, Financial Statements Schedules 86

SIGNATURES

SIGNATURES Table of Contents Cautionary Statement Regarding Forward-Looking Statements This report contains forward-looking statements that involve risks and uncertainties, such as statements related to future events, business strategy, future performance, future operations, backlog, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management. All statements other than statements of historical fact may be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "seek," "anticipate," "plan," "continue," "estimate," "expect," "may," "will," "project," "predict," "potential," "target," "intend," "could," "might," "should," "believe," "outlook" and similar expressions or their negative. Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on management's belief, based on currently available information, as to the outcome and timing of future events. These statements involve estimates, assumptions, known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those expressed in such forward-looking statements. When evaluating forward-looking statements, you should consider the risk factors and other cautionary statements described below under the heading "Risk Factors." We believe that the expectations reflected in the forward-looking statements contained in this report are reasonable, but no assurance can be given that these expectations will prove to be correct. Important factors that could cause actual results or events to differ materially from those expressed in forward-looking statements include, but are not limited to: declines in public infrastructure construction and reductions in

Business

Item 1. Business Overview We are a civil infrastructure company that specializes in the construction and maintenance of roadways across Alabama, Florida, Georgia, North Carolina, Oklahoma, South Carolina, Tennessee and Texas. Through our wholly owned subsidiaries, we provide a variety of products and services to both public and private infrastructure projects, with an emphasis on highways, roads, bridges, airports, and commercial and residential developments. Consistent with our vertical integration strategy, our primary operations consist of (i) manufacturing and distributing hot mix asphalt ("HMA") for both internal use and sales to third parties in connection with construction projects, (ii) paving activities, including the construction of roadway base layers and application of asphalt pavement, (iii) site development, including the installation of utility and drainage systems, (iv) mining aggregates, such as sand, gravel and construction stone, that are used as raw materials in the production of HMA and for sales to third parties, and (v) distributing liquid asphalt cement for both internal use and sales to third parties in connection with HMA production. Construction Partners, Inc. was formed as a Delaware corporation in 2007 as a holding company to facilitate an acquisition growth strategy in the HMA paving and construction industry. As used in this report, the terms "Company," "we," "our" and "us" refer to Construction Partners, Inc. and its subsidiaries, except when the context requires that those terms mean only the parent company or a particular subsidiary. Recent Developments ROAD 2030. In October 2025, we publicly announced "ROAD 2030," a comprehensive business plan setting forth our strategic initiatives, growth priorities, and business outlook through fiscal year 2030. ROAD 2030 contemplates several revenue and growth goals, including, among others, revenues exceeding $6 billion by the end of fiscal year 2030. 2025 Fiscal Year Acquisitions. Duri

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