Cardinal Infrastructure Group has agreed to buy Hughes Brothers Construction, a Central Florida site development and underground utility contractor, for $357.5 million in cash and stock. If the sellers hit an earnings target for 2026, another $97.5 million comes due, which would put the total near $455 million.
The Raleigh, North Carolina, contractor announced the Hughes Brothers acquisition on Oct. 13, less than two weeks after it closed its $120 million purchase of Atlanta-based Allied Paving. That’s two new-market platforms bought this fall, and the second costs three times the first.
What Cardinal gets in the Hughes Brothers acquisition
Hughes Brothers does wet utilities, sewer, gas main installation, earthwork, roadway work and large-scale site development for residential, commercial, industrial and municipal clients. Cardinal says its projects average more than 80 acres. The company self-performs a big share of its work, owns its fleet through a separate equipment subsidiary and has more than 500 employees.
Trailing 12-month revenue topped $220 million as of June 30. Backlog is about $350 million. Co-founders Chad Hughes and Justin Hughes stay on as president and vice president.
Cardinal will fund the cash portion with new debt and cash on hand, and the sellers’ shares carry a 180-day lock-up. Closing is expected in the fourth quarter, subject to regulatory approvals.
The price against Cardinal’s own numbers
The base price works out to about 1.6 times trailing revenue. Cardinal didn’t disclose Hughes Brothers’ EBITDA. It said only that the multiple is in line with what it usually pays for a new-market platform.
Its last one is the obvious yardstick. In its August results release, Cardinal said it paid 5.5 times adjusted EBITDA for Allied, which earns a 20.3% margin on roughly $108 million of revenue. Apply the same multiple here and Hughes Brothers would be throwing off about $65 million of adjusted EBITDA, a margin near 30%. That’s our arithmetic, not Cardinal’s, and it would be a rich number for site work.
The earnout is the other tell. At 27% of the base price, it’s large enough to suggest buyer and seller didn’t agree on what 2026 earnings will look like, so they’re letting the year settle it.
Scale matters too. Cardinal guided in August to $880 million to $900 million of 2026 revenue and reported $866 million of backlog at midyear. Hughes Brothers adds roughly a quarter to the revenue base and about 40% to backlog. Cardinal puts pro forma net debt at 1.4 times EBITDA, under its 2.5 times ceiling, and says the deal lifts its guided 16% to 18% adjusted EBITDA margin right away.
Why a Central Florida site contractor fits the plan
CEO Jeremy Spivey framed the deal as a step toward a Southeast site development platform. North Carolina, then Atlanta, now Central Florida. A self-performing contractor with its own iron fits that model, because large residential and industrial pads need the same earthwork and wet utility crews, and a contractor that owns its fleet doesn’t wait on a rental yard when a developer speeds up.
Residential is the exposure. A site contractor whose backlog leans on subdivision lots feels a housing slowdown before anyone else on the job, and Cardinal hasn’t said how Hughes Brothers’ $350 million splits between private development and municipal work.
That split is the number to look for when Cardinal reports third-quarter results. Until then, it’s paying a platform price for a business whose end markets it hasn’t broken out.