Quarterly report pursuant to Section 13 or 15(d)

Business Acquisition

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Business Acquisition
 3 Months Ended
Dec. 31, 2024
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]  
Business Acquisition Business Acquisition
Lone Star Paving
On November 1, 2024, the Company acquired all of the outstanding membership units of Asphalt Inc., LLC (doing business as Lone Star Paving) (“Lone Star Paving” and such acquisition, the “Lone Star Acquisition”), a vertically integrated asphalt manufacturing and paving company headquartered in Austin, Texas, with 10 HMA plants, four aggregate facilities, and one liquid asphalt terminal supporting its operations. The aggregate consideration delivered at the closing of the Lone Star Acquisition consisted of (i) $654.2 million in cash (as adjusted pursuant to the purchase agreement) and (ii) 3,000,000 shares of Class A common stock having an aggregate fair market value of approximately $236.3 million at closing. In addition, the Company agreed to (i) pay cash to the selling unit holders in an amount equal to the working capital remaining in Lone Star Paving at closing, as finally determined (subject to adjustments and offsets to satisfy certain indemnification obligations and any purchase price overpayments), to be paid out in quarterly installments over four quarters following the closing and (ii) purchase from the selling unit holders for $30.0 million in cash an entity that owns certain real property following receipt of specified operational entitlements, which had not occurred as of December 31, 2024. The total amount of consideration for the Lone Star Acquisition remains subject to post-closing adjustments with respect to settlement of working capital and other matters. At December 31, 2024, $86.0 million was reflected on the Company’s Consolidated Balance Sheets within accrued expenses and other current liabilities, representing the estimated working capital payable.
The Lone Star Acquisition was accounted for as a business combination in accordance with ASC Topic 805, Business Combinations (“Topic 805”). As of December 31, 2024, the purchase price allocation had not yet been finalized due to the recent timing of the Lone Star Acquisition, as certain information was pending on such date to finalize estimates of fair value of certain assets acquired and liabilities assumed. The Company consulted with independent third parties to assist in the valuation process. The Company expects to finalize the estimate of fair values as soon as practicable and no later than one year from the date of the Lone Star Acquisition.
Identifiable assets acquired and liabilities assumed were recorded at their estimated fair values based on the methodology described
under “Fair Value Measurements” in Note 2 - Significant Accounting Policies. The amount of the purchase price exceeding the net fair
value of identifiable assets acquired and liabilities assumed was recorded as provisional goodwill in the amount of approximately
$410.8 million, which is deductible for income tax purposes. Goodwill primarily represents the assembled work force and
synergies expected to result from the Lone Star Acquisition, which may change as estimates are finalized.

The following table summarizes the consideration for the Lone Star Acquisition and the provisional amounts of identified assets acquired and liabilities assumed as of December 31, 2024 (unaudited, in thousands):
Total
Cash and cash equivalents $ 9,984 
Contracts receivable including retainage 96,491 
Cost and estimated earnings in excess of billings on uncompleted contracts 3,972 
Inventories 28,070 
Prepaid expenses and other current assets 94 
Property, plant and equipment 409,021 
Operating lease right-of-use assets 2,006 
Intangible assets 68,700 
Total assets 618,338 
Accounts payable 40,059 
Billings in excess of costs and estimated earnings on uncompleted contracts 10,293 
Accrued expenses and other current liabilities 342 
Operating lease liabilities 2,006 
Total liabilities 52,700 
Goodwill 410,812 
Total cash consideration transferred 654,200 
Fair value of Class A common stock transferred 236,250 
Total consideration payable 86,000 
Total purchase price $ 976,450 


The Consolidated Statements of Comprehensive Income (Loss) includes $61.0 million of revenue and $3.7 million of net loss, excluding acquisition-related expenses, attributable to the operations of Lone Star Paving for the period from the acquisition date through December 31, 2024. The Company recorded certain costs related to the Lone Star Acquisition as they were incurred, which are reflected in acquisition-related expenses on the Company’s Consolidated Statements of Comprehensive Income (Loss) in the amount of $18.5 million for the three months ended December 31, 2024.

The following table presents pro forma revenue and net income as though the Lone Star Acquisition had occurred on October 1, 2023 (unaudited, in thousands):

For the Three Months Ended December 31,
2024 2023
Pro forma revenue $ 624,273  $ 571,104 
Pro forma net income $ 17,856  $ 12,151 
Pro forma financial information is presented as if the operations of Lone Star Paving had been included in the consolidated results of the Company since October 1, 2023, and gives effect to transactions that are directly attributable to the Lone Star Acquisition, including adjustments to:
(a)include the pro forma results of operations of Lone Star Paving for the three months ended December 31, 2024 and 2023;
            
(b)include additional depreciation and depletion expense related to the fair value of acquired property, plant and equipment and reserves at aggregates facilities, as applicable, as if such assets were acquired on October 1, 2023 and subject to the Company’s depreciation and depletion methodologies as of that date;

(c)include interest expense under the Term Loan B (as defined below) credit facilities as if the funds borrowed to finance the purchase price were borrowed on October 1, 2023, and assuming that (i) no principal payments were made from October 1, 2023 through December 31, 2024 and (ii) the interest rate in effect on the date of the Lone Star Acquisition was in effect from October 1, 2023 through December 31, 2024; and

(d)exclude $19.1 million of acquisition-related expenses from the three months ended December 31, 2024, as though such expenses were incurred prior to the pro forma acquisition date of October 1, 2023.

Pro forma information is presented for informational purposes only and may not be indicative of revenue or net income that would have been achieved if the Lone Star Acquisition had occurred on October 1, 2023.
Provisional Accounting
During the three months ended December 31, 2024, there has been no material measurement period adjustments to provisional acquisitions as reported in the 2024 Form 10-K.