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  "documentTitle": "Construction Partners, Inc. (ROAD)",
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  "authorName": "Spruce Point Capital Management",
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  "presentationDate": "2025-01-23 00:00:00",
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  "notes": "The slide uses a table to calculate the ratio of deal costs to cash paid for acquisitions over a 7-year period.",
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      "kind": "callout",
      "text": "ROAD's Recent Deal Cost Disclosure\n\n\"The Company records certain costs to effect acquisitions as they are incurred, which are reflected in general and administrative expenses on the Company's Consolidated Statements of Comprehensive Income in the amounts of $1.5 million, $0.3 million, and $0.8 million for the fiscal years ended September 30, 2024, 2023 and 2022, respectively.\"",
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      "text": "Even if ROAD is sourcing transactions internally without the assistance of banker, we still think that its 0.6% average cost ratio is low.",
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      "text": "Deal costs / Cash For Deals: 0.6%",
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      "text": "In addition to our concerns about revenue, backlog and quality of cash flow, we also observe that ROAD has unusually low M&A costs in effecting its roll-up strategy. According to E&Y, M&A transaction costs typically range from 1% - 4% of the deal value and smaller deals can be more expensive than larger ones due to other costs.(1) Even if ROAD is sourcing transactions internally without the assistance of banker, we still think that its 0.6% average cost ratio is low.",
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      "text": "The Company records certain costs to effect acquisitions as they are incurred, which are reflected in general and administrative expenses on the Company's Consolidated Statements of Comprehensive Income in the amounts of $1.5 million, $0.3 million, and $0.8 million for the fiscal years ended September 30, 2024, 2023 and 2022, respectively. — ROAD 10-K filings",
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      "text": "1) “Beyond the deal: accurately estimating M&A integration costs”, E&Y, Dec 9, 2024\nSource: ROAD 10-K filings",
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      "text": "ROAD's Acquisitions table showing # of acquisitions, net cash paid, average deal size, deal costs in G&A, and deal costs/cash ratio from 2018-2024.",
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      "kind": "title",
      "text": "ROAD Has Suspiciously Low Deal Costs",
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