Cardinal Infrastructure Group has announced a definitive agreement to acquire Hughes Brothers Construction, a prominent heavy civil and site development contractor based in Central Florida, for up to $455 million. This acquisition marks a significant expansion for Cardinal into the Central Florida market, enhancing its capabilities in residential, commercial, industrial, and municipal sectors.
What Happened
Cardinal Infrastructure Group will purchase Hughes Brothers Construction with an initial price of $357.5 million. If Hughes Brothers meets certain adjusted EBITDA targets by the end of 2026, the total purchase price could rise to approximately $455 million. The deal is expected to close in the fourth quarter of 2026, pending regulatory approvals and customary closing conditions.
Hughes Brothers Construction, with over 500 employees, is known for its work in underground utilities, site preparation, and roadway construction. The company owns a significant equipment fleet and self-performs much of its work. It generated over $220 million in revenue for the year ending June 30, 2026, and holds a backlog of approximately $350 million.
Cardinal plans to fund the acquisition with cash and Cardinal Class A common stock, with the cash component financed through new debt and existing cash reserves. The stock issued to Hughes Brothers' selling shareholders will be subject to a 180-day lock-up. The acquisition is projected to be immediately accretive to Cardinal's 2026 adjusted EBITDA margin.
What This Means for Your Business
This acquisition positions Cardinal Infrastructure Group as a formidable player in the Central Florida construction market, offering expanded capabilities and a broader service portfolio. For government contractors and AECM professionals, this merger underscores the importance of strategic acquisitions to enhance competitive positioning and market reach.
The deal also highlights the potential for increased federal and municipal project opportunities in Florida, a region experiencing rapid growth. Companies should anticipate heightened competition for contracts and consider strategic partnerships or expansions to maintain a competitive edge.
What US Operators Should Watch
Operators should monitor the progress of this acquisition, particularly the regulatory approval process leading up to its expected close in late 2026. They should also track Hughes Brothers' performance against the specified EBITDA targets, as these will influence the final acquisition price.
For compliance officers, it will be crucial to stay updated on any changes in regulatory requirements or bidding opportunities that may arise from Cardinal's expanded presence in the Central Florida market. Additionally, the acquisition's impact on Cardinal's financial strategy, including its leverage ratio, could signal future moves in the industry.
Source: Pulse2. Read the original story ->
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