Cardinal to Buy Florida's Hughes Brothers for $357.5M, Up to $455M

Cardinal Infrastructure Group, a Raleigh, North Carolina heavy civil and site development contractor, has agreed to buy Central Florida's Hughes Brothers Construction for $357.5 million, with performance payments that could lift the total to about $455 million, according to ENR and Pulse 2.0. The deal, announced October 13 and expected to close in the fourth quarter, gives Cardinal a large self performing site work platform in one of the country's busiest land development markets.

What Happened

Hughes Brothers, headquartered in Wildwood, Florida, does underground utilities, earthwork, grading, roadways and site development ENR. It has more than 500 employees, trailing 12 month revenue of more than $220 million through June 30, 2026, and backlog of about $350 million. ENR reported the company owns more than 300 pieces of heavy equipment and runs about 25 full time underground utility pipe crews. Pulse 2.0 reported that Hughes Brothers self performs much of its work, including sewer and gas main installation, and that its average project covers more than 80 acres Pulse 2.0.

Residential development makes up most of Hughes Brothers' work, with commercial, industrial and municipal work also in the mix ENR. ENR cited two representative projects: Mass Grade 11A in Sumter County, with about 14 million cubic yards of earthwork and more than 10 miles of multilane roadway, and Ham Brown Reserve in Central Florida, with 900,000 cubic yards of earthwork, 120 acres cleared and 10,000 linear feet of offsite force main.

Deal Terms

• Price. $357.5 million up front, plus up to $97.5 million in earn out payments in cash and Cardinal Class A stock if Hughes Brothers hits adjusted EBITDA targets for the 12 months ending December 31, 2026 Pulse 2.0.
• Financing. About $156 million in new debt, existing cash and Class A common stock, with at least 40% of the consideration in Cardinal shares, ENR reported. Shares issued to the sellers carry a 180 day lock up, according to Pulse 2.0.
• Leverage. Cardinal expects pro forma net leverage of 1.4 times, below its 2.5 times maximum target, and expects the deal to be immediately accretive to its guided 2026 adjusted EBITDA margin range Pulse 2.0.
• Leadership. Co founders Chad Hughes and Justin Hughes will stay on as president and vice president.
• Timing. Closing is expected in the fourth quarter, subject to regulatory approvals and customary conditions.

Cardinal's Southeast Strategy

This is Cardinal's fourth acquisition of 2026, following A.L. Grading Contractors in Georgia, Piedmont Pipe Construction in North Carolina and Allied Paving Contractors, which closed October 1 ENR. Cardinal plans to use Hughes Brothers as a platform for more growth and targeted acquisitions in Florida Pulse 2.0.

CEO Jeremy Spivey called Hughes Brothers "an exceptional founder-led business that culturally aligns with what we're building" and said the company aims to "build the Southeast's premier site development platform" Pulse 2.0. He said Hughes Brothers' backlog has been "substantially moving higher," ENR reported, and CFO Mike Rowe pointed to its experienced workforce and owned equipment fleet.

The Residential Question

Analysts focused on Hughes Brothers' residential exposure. Stifel's Brian Brophy asked how backlog had trended over the past year ENR. Spivey answered that "the residential seems to be having some pretty good tailwinds in that specific market." That bet comes as national homebuilder sentiment is weak; we reported this week that builder confidence fell to 29 in October, its lowest since 2012. Central Florida's large master planned communities, such as the Sumter County work ENR described, are the kind of demand Cardinal is counting on.

Cardinal's own margins have also tightened. ENR reported its second quarter adjusted EBITDA margin fell to 12.4% from 18.6% a year earlier, against full year guidance of 16% to 18%.

Implications for Owners, Developers, Contractors and Subs

• Consolidation in site work. Large, equipment heavy site contractors are being rolled into regional platforms. Developers may see fewer independent bidders on big mass grading and utility packages, but bigger balance sheets behind them.
• Self performance is the asset. Cardinal is paying for owned equipment and in house pipe crews. That capacity is what limits how fast master planned communities can be graded and served.
• Competition for crews. A better capitalized buyer may expand Hughes Brothers' reach, which could tighten the Central Florida market for operators and pipe crews.
• Subcontract opportunities. Platforms growing through acquisition often lean on local paving, trucking and specialty subs as they take on more work.

What to Watch

• Closing in the fourth quarter and whether the earn out targets are met for 2026.
• Further Florida acquisitions by Cardinal.
• Central Florida residential lot development as builder sentiment remains weak nationally.

Bottom Line

Cardinal's purchase of Hughes Brothers is a large bet on Florida land development, paid for with debt, cash and stock, and it makes Cardinal a major site work player in Central Florida. Whether the price pays off depends on residential demand holding up in a market that has outperformed national sentiment so far, while heavy public programs such as the Florida Turnpike widening continue to compete for the same equipment and crews.

Related Coverage

• Builder Confidence Falls to 29 in October, Lowest Since 2012
• Florida's $20 Billion Turnpike Widening Reaches 55 Percent Complete
• Azalea Cay Starts $109.8 Million First Phase on Former Raytheon Site in St. Petersburg
• Tampa Bay Apartment Owners Face Refinancing Gap as Boom-Era Loans Mature

Image credit: Hughes Brothers Construction, via ENR. Image from the source article.

Sources

• ENR, "Cardinal's $358M Florida Deal Expands Heavy Civil Construction Footprint": https://www.enr.com/articles/63929-cardinals-358m-florida-deal-expands-heavy-civil-construction-footprint
• Pulse 2.0, "Cardinal Infrastructure Group To Acquire Hughes Brothers Construction For Up To $455 Million": https://pulse2.com/cardinal-infrastructure-group-to-acquire-hughes-brothers-construction-for-up-to-455-million/