Cardinal Infrastructure Group (CDNL) Enters into Amended Agreement for Acquisition of Hughes Brothers Construction Inc.

The revised terms increase the cash share of the purchase price while retaining stock consideration and a performance-based earnout.

Rhea-AI Summary

Cardinal Infrastructure Group (NASDAQ: CDNL) amended its agreement to acquire Hughes Brothers Construction, maintaining the $357.5 million purchase price while changing the consideration.

The mix shifts from 50% cash and 50% stock to 60% cash and 40% stock: approximately $214.5 million and 5,255,420 Class A shares at $27.21 each. Sellers could also receive up to $162.5 million based on Hughes Brothers' adjusted EBITDA for the 12 months ending June 30, 2027, payable in the same mix, including up to approximately 2,388,827 additional shares.

Cardinal expects immediate accretion to adjusted EBITDA per share and closing in the fourth quarter of 2026, subject to regulatory approvals and customary conditions. Hughes Brothers brings a Central Florida platform and approximately $350 million in backlog; its adjusted EBITDA margin was 25% on $220 million in revenue for the 12 months ended June 30, 2026. Adjusted EBITDA is a non-GAAP earnings measure.

2 points · 1 major

MixediHow this balance works

How this balance works

Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.

It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.

Rhea-AI Sentiment measures something else, the tone of the wording.

How the balance worksHow Sentiment works

2 major · 6 points

Hollow bars mark forward-looking points. How the balance works

Positive

• Major point. Forward-looking: it has not happened yet and may not happen.The $357.5 million acquisition agreement would establish Cardinal's platform in Central Florida. 1.1× market cap
• Moderate point. Forward-looking: it has not happened yet and may not happen.Cardinal expects the acquisition to be immediately accretive to adjusted EBITDA per share.

Negative

• Major point. Forward-looking: it has not happened yet and may not happen.Cash consideration rises from 50% to 60%, requiring approximately $214.5 million at closing. 68% of market cap
• Major point. Forward-looking: it has not happened yet and may not happen.Performance-based earnout adds potential consideration of up to $162.5 million, payable 60% cash and 40% stock. 52% of market cap
• Minor point. Forward-looking: it has not happened yet and may not happen.Issuance of 5,255,420 Class A shares at $27.21 per share would dilute existing holders.
• Minor point. Forward-looking: it has not happened yet and may not happen.Earnout stock could add up to approximately 2,388,827 shares at $27.21 per share, further diluting holders.
• Minor point. Forward-looking: it has not happened yet and may not happen.Cash funding includes borrowings under Cardinal's existing credit facility, adding debt.
• Minor pointExpected fourth-quarter 2026 closing remains subject to regulatory approvals.

News Explained

The amendment specifies that the approximately $214.5 million cash consideration will be funded through cash on hand and borrowings under Cardinal’s existing credit facility.

Argus 15 min delay 2 alerts

+4.51% vs previous close $15.28 last price 3.2x rel. volume Open Argus

Details

Market move: CDNL +4.51% vs previous close. Hughes Brothers acquisition amendment

$15.00 – $15.70 Day Range

$327.53M Mkt Cap at Last Price

On Oct 19, the day this news came out, the latest delayed price for CDNL is 4.51% above the previous close. Our momentum scanner has recorded 2 alerts for this stock so far that day. The latest delayed price is $15.28. Relative volume is very high at 3.2x the average.

Data tracked by StockTitan Argus (15 min delayed). Upgrade to Gold for real-time data.

Key Figures

Purchase price: $357.5 million Consideration mix: 60% cash / 40% Cardinal Class A common stock Cash consideration: Approximately $214.5 million +4 more

Purchase price

$357.5 million

Hughes Brothers acquisition; unchanged by the amendment

Consideration mix

60% cash / 40% Cardinal Class A common stock

Amended agreement; previously 50% cash / 50% stock

Cash consideration

Approximately $214.5 million

Payable to Hughes Brothers' owners

Stock consideration

5,255,420 shares at $27.21 per share

Cardinal Class A common stock issued to the owners

Maximum earnout

Up to $162.5 million

Based on adjusted EBITDA for the 12 months ending June 30, 2027

Adjusted EBITDA margin

25%

Hughes Brothers, 12 months ended June 30, 2026

Revenue

$220 million

Hughes Brothers, 12 months ended June 30, 2026

Previous Acquisition Reports

1 past event · Latest: Oct 13

Same Type 1 event

1. Oct 13

   Acquisition agreement

   24h Move

   -11.0%

   Earlier definitive agreement documented the same $357.5 million price and an earnout of up to $97.5 million.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Key Terms

adjusted ebitda, non-gaap, gaap, regulation g

4 terms

adjusted ebitda financial

"The amended agreement also revises the earnout so that the sellers will be eligible to receive up to"

Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.

non-gaap financial

"Adjusted EBITDA and Adjusted EBITDA margin, which are "non-GAAP" financial measures"

Non-GAAP refers to financial measures that companies use to show their earnings or performance without including certain expenses or income that are often added back to give a different picture. It matters because it can make a company's results look better or more favorable, but it may also hide important costs, so investors need to look at both GAAP (official rules) and non-GAAP numbers to get a full understanding.

View in glossary

gaap financial

"financial results in accordance with U.S. generally accepted accounting principles ("GAAP")"

GAAP, or Generally Accepted Accounting Principles, are a set of standardized rules and guidelines that companies follow when preparing their financial statements. They ensure consistency, transparency, and comparability across different companies, making it easier for investors to understand and compare financial information accurately. This helps investors make informed decisions based on trustworthy and uniform financial reports.

View in glossary

regulation g regulatory

"as defined in Regulation G under the Securities Exchange Act of 1934"

Regulation G is a U.S. securities rule that requires companies to show and explain how any highlighted financial numbers that differ from standard accounting figures were calculated, and to provide a clear bridge to the official results. For investors this acts like a recipe card: when a company presents a simplified or adjusted profit number, Regulation G forces them to show the original ingredients and steps so readers can judge whether the adjusted figure gives a clearer or misleading picture of financial health.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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RALEIGH, N.C., Oct. 19, 2026 /PRNewswire/ -- Cardinal Infrastructure Group, Inc., (NASDAQ: CDNL) ("Cardinal" or the "Company") today announced that it has entered into an amendment to its previously announced agreement to acquire Hughes Brothers Construction Inc. ("Hughes Brothers"), a leading Central Florida heavy civil and site development contractor.

The amended agreement maintains the $357.5 million purchase price and changes the consideration to 60% cash and 40% Cardinal Class A common stock, from 50% of each previously. Hughes Brothers' owners will receive approximately $214.5 million in cash and 5,255,420 shares of Cardinal Class A common stock, based on an issue price of $27.21 per share.

The amendment also revises the earnout so that the sellers will be eligible to receive up to a maximum of $162.5 million based on Hughes Brothers adjusted EBITDA for the 12 months ending June 30, 2027, payable 60% in cash and 40% in stock. At the maximum, the earnout would include up to approximately 2,388,827 additional shares at the issue price of $27.21 per share.

Cardinal expects the acquisition to be immediately accretive to adjusted EBITDA per share. Hughes Brothers generated an adjusted EBITDA margin¹ of 25% on revenue of $220 million for the 12 months ended June 30, 2026, and its current backlog of approximately $350 million provides visibility into future revenue and profitability. The acquisition establishes a scaled platform in the fast-growing Central Florida market and supports Cardinal's strategy to build the Southeast's premier site development platform.

The transaction is still expected to close in the fourth quarter of 2026, subject to regulatory approvals and customary closing conditions. The cash consideration will be funded through cash on hand and borrowings under Cardinal's existing credit facility.

For more details, see Cardinal's Current Report on Form 8-K filed today with the Securities and Exchange Commission.

About Hughes Brothers

Hughes Brothers is a leading Central Florida heavy civil and site development contractor focused on underground utilities, site preparation, earthwork, sewer, gas main installation, roadway construction and related infrastructure work. The company serves residential, commercial, industrial and municipal customers, with expertise in wet utility installation and large-scale site development projects. Hughes Brothers self-performs a significant portion of its work and owns its fleet through a dedicated equipment subsidiary.

About Cardinal

Cardinal Infrastructure Group delivers its suite of comprehensive infrastructure services that support the planning, preparation, installation, and development of residential, commercial, industrial, municipal, and state infrastructure projects through wholly owned, market leading subsidiaries. Cardinal's operations leverage in-house, highly skilled teams and equipment fleets to deliver wet utility installations (water, sewer, and stormwater systems), as well as grading, site clearing, erosion control, drilling and blasting, paving, and other related site services.

Important Information for Investors and Stockholders

Non-GAAP Measures

This press release includes a discussion of Adjusted EBITDA and Adjusted EBITDA margin, which are "non-GAAP" financial measures as defined in Regulation G under the Securities Exchange Act of 1934. Cardinal and Hughes Brothers report financial results in accordance with U.S. generally accepted accounting principles ("GAAP") but believe that certain non-GAAP financial measures provide useful supplemental information to investors regarding the underlying business trends and performance of their respective ongoing operations and is useful for period-over-period comparisons of those operations. Non-GAAP measures should be used in addition to, and not in lieu of, results prepared in conformity with GAAP.

The following table provides a reconciliation of Hughes Brothers net income to EBITDA, and adjusted EBITDA to adjusted EBITDA margin for the 12 months ended June 30, 2026:

(in thousands)	Twelve months ended June 30, 2026
Revenue	$          220,003
Net income	$            27,588
Interest expense, net	555
Income tax (benefit) expense	—
Depreciation and amortization expense	13,799
EBITDA	$           41,942
Owner discretionary costs	7,844
Non-recurring warranty matter, net	4,048
Job margin true-ups, net	2,992
Other normalization and pro forma, net	(1,825)
Adjusted EBITDA	$           55,001
Net Income Margin(1)	12.5 %
EBITDA Margin(1)	19.1 %
Adjusted EBITDA Margin(1)	25.0 %

__________________________ (1)     Calculated as a percentage of revenue

Cardinal is not able to provide the most directly comparable GAAP financial measure, or a quantitative reconciliation thereto, for the forward-looking guidance of estimated Adjusted EBITDA Margin without unreasonable effort due to the inherent uncertainty and difficulty in predicting the timing and amount of certain items, including but not limited to amortization of intangible assets and depreciation, which may be significant and difficult to project with a reasonable degree of accuracy, as the allocation of purchase price to intangible assets and property and equipment has not yet been performed. Because these adjustments are inherently variable and uncertain and depend on various factors that are beyond Cardinal's control, Cardinal is also unable to predict their probable significance. The variability of these items could have an unpredictable, and potentially significant, impact on Cardinal's future GAAP financial results.

Cautionary Statement Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 concerning, among other things, Cardinal Infrastructure Group, Inc.'s, ("Cardinal") acquisition (the "Hughes Brothers Acquisition") of Hughes Brothers Construction Inc., ("Hughes Brothers") and the expected benefits of the Hughes Brothers Acquisition. Statements that are predictive in nature, that depend upon or refer to future events or conditions or that include the words "may," "could," "plan," "project," "budget," "predict," "pursue," "target," "seek," "objective," "believe," "expect," "anticipate," "intend," "estimate," and other expressions that are predictions of or indicate future events and trends and that do not relate to historical matters identify forward-looking statements. These statements involve risks and uncertainties, and Cardinal's actual results could differ materially from the results expressed or implied by such forward-looking statements. The potential risks, uncertainties and other factors that could cause actual results to differ from those expressed by the forward-looking statements in this press release include, but are not limited to, the possibility that any of the anticipated benefits of the Hughes Brothers acquisition will not be realized to the extent or when expected; the risk that integration of Hughes Brothers' operations with those of Cardinal will be materially delayed or will be more costly or difficult than expected; the challenges of integrating and retaining key employees; the effect of the announcement of the Hughes Brothers acquisition on Hughes Brothers' and Cardinal's business relationships, operating results and business generally; difficulty in sustaining rapid revenue growth, which may place significant demands on Cardinal's administrative, operational and financial resources, fluctuations in Cardinal's revenue and the concentration of Cardinal's business in the Southeastern United States. Cardinal has based these forward-looking statements largely on its current expectations and projections regarding future events and trends that it believes may affect its business, financial condition and results of operations. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors described in the section entitled "Risk Factors" in Cardinal's Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (the "Annual Report"), and elsewhere in the Annual Report, as well as in Cardinal's subsequent filings with the Securities and Exchange Commission. Accordingly, you should not rely upon forward-looking statements as predictions of future events. Cardinal cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those projected in the forward-looking statements. Although forward-looking statements reflect the good faith beliefs of Cardinal's management at the time they are made, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to differ materially from anticipated future results, performance or achievements expressed or implied by such forward-looking statements. Cardinal undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, unless required by law. These cautionary statements qualify all forward-looking statements attributable to Cardinal or persons acting on its behalf.

______________________________ 1 Adjusted EBITDA Margin is a Non-GAAP Financial Measure. See "Important Information for Investors and Stockholders – Non-GAAP Measures" regarding non-GAAP financial measures and a reconciliation of Adjusted EBITDA Margin to the most comparable GAAP financial measure.

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SOURCE Cardinal Infrastructure Group Inc.

FAQ

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What changed in Cardinal Infrastructure Group's Hughes Brothers acquisition agreement?

The $357.5 million purchase price is unchanged, but consideration shifts from 50% cash and 50% stock to 60% cash and 40% stock. Sellers will receive approximately $214.5 million in cash and 5,255,420 Cardinal Class A shares, based on an issue price of $27.21 per share.

How does Cardinal's revised Hughes Brothers earnout work?

Sellers are eligible for up to $162.5 million based on Hughes Brothers' adjusted EBITDA for the 12 months ending June 30, 2027. Payment would be 60% cash and 40% stock. At the maximum, the stock portion would include up to approximately 2,388,827 additional shares at $27.21 per share.

How will Cardinal fund the cash portion of the Hughes Brothers acquisition?

Cardinal will fund the cash consideration through cash on hand and borrowings under its existing credit facility.