Raleigh-based Cardinal Infrastructure Group has planted its flag in metro Atlanta, closing a $245.5 million acquisition of Sugar Hill mainstay A.L. Grading Contractors on February 18, 2026. The move pulls a fourth-generation dirt and utilities player into Cardinal's orbit and comes with a sweetener for the balance sheet: an amended credit agreement that lifts the company’s term loan facility to $200 million. Cardinal executives say the deal should pad backlog, lift margins and bring ALGC’s leadership into the company’s upper ranks.
Deal details
According to a recent SEC filing, Cardinal agreed to total consideration of $245.5 million, split among $128.6 million in cash, 4,186,062 limited liability company Common Units valued at roughly $108.0 million, and 345,666 Class A shares issued to ALGC employees and service providers. The equity portion is subject to post-closing lockups, and the filing notes that the Hart-Scott-Rodino waiting period expired on February 17, 2026. The 8-K describes A.L. Grading Contractors as a site-development contractor that works across residential, commercial and industrial projects throughout the greater Atlanta area.
Financing and guidance
Cardinal funded the purchase with a mix of cash on hand, newly issued equity and additional borrowings after its lenders, led by Truist Bank, agreed to raise the company’s term-loan facility from $120 million to $200 million. In a press release carried on PR Newswire, Cardinal rolled out preliminary estimates for 2025 and refreshed guidance for 2026, calling for approximately $665 to $678 million in revenue next year and a consolidated Adjusted EBITDA margin of at least 20 percent. Management framed the ALGC acquisition as immediately accretive, an effort to deepen Cardinal’s Southeast platform and sharpen its margin profile.
Atlanta footprint
A.L. Grading Contractors is a fourth-generation, family-owned grading and utilities contractor based in Sugar Hill that offers grading, underground utilities, erosion control and other site-development services, according to the ALGC website. The company highlights a long-running project list across the Atlanta metro and a headquarters on Peachtree Industrial Boulevard, underscoring how local the operation is. That on-the-ground history is a key reason Cardinal has pitched the deal as strategic for expanding its self-performed services in Georgia.
Tax, leases and governance
The same SEC filing also details a Tax Benefit Agreement under which Cardinal agreed to pay the seller 85 percent of any tax benefits it realizes from basis step-ups tied to the transaction. It outlines long-term facility leases with entities controlled by the seller owners as well. Cardinal entered three-year employment agreements for ALGC’s principals, with an expected board seat lined up for ALGC’s president and a chief operating officer role planned for the company’s vice president. Those related-party leases and compensation packages are laid out in the exhibits to the 8-K and are likely to draw attention from investors who keep close tabs on integration and governance risk.
What analysts will watch
Market commentary views ALGC as a margin-accretive addition but notes that higher leverage and integration risk come with the territory. Cardinal has presented conservative pro forma leverage metrics that investors can track. StreetInsider points to the combination of cash, equity and increased borrowing and calls out pro forma figures that the market is likely to monitor closely. The key questions are how quickly Cardinal can translate ALGC’s field margins into consolidated performance, and whether it can hold on to key customers and personnel, which will determine whether this deal speeds up growth or simply puts more strain on the balance sheet in the near term.
“We are thrilled to welcome the ALGC team into the Cardinal family,” CEO Jeremy Spivey said in a press release distributed via PR Newswire, underscoring management’s view that the acquisition accelerates the company’s Southeast expansion. For Atlanta contractors and local developers, the deal connects a deeply rooted regional operator to a larger public platform, and the next six to twelve months will show whether Cardinal can turn that combination into the kind of results it has promised in its guidance.
