Fill and Sign the Construction Partners Inc Form S 1 Received 0406

PROPOSED ACQUISITION OF OAK GROVE FORUM, INC. PROPERTY To meet existing expansion requirements and provide for future growth the Board of Directors has, subject to shareholder approval, agreed to acquire substantially all the property of Oak Grove Forum, Inc. ("Oak Grove") in exchange for 103,600 shares of Company Common Stock. Oak Grove is the developer of Oak Grove Park ("Park"), the industrial park where Pengo's headquarters have been located since its spin-off from Gearhart Industries. The President and sole shareholder of Oak Grove is Charles L. Owen, the brother of Harrold D. Owen, the President and Chairman of the Board of Directors of the Company. Under the terms of the agreement to acquire the property the shareholders of both the Company and Oak Grove must approve the transaction. The agreement contains customary representations principally designed to insure that the Company obtains good and marketable title to the properties, free of undisclosed. defects and encumbrances. The Company and Oak Grove are treating the transaction as a tax free reorganization under Section 368 (a)(1)(C) of the Internal Revenue Code and it will be accounted for by the Company as a purchase. Following Company shareholder approval, the Company will file a Registration Statement with the Securities and Exchange Commission covering the Company shares to be issued and the solicitation of the Oak Grove shareholder approval. The property to be acquired is seven tracts of land consisting of approximately 63.6 acres which is the balance of the property owned by Oak Grove in the Park. Two of the tracts have buildings of 8,000 and 45,000 sq. ft. which were completed in 1980. The Company's executive offices and manufacturing facility at 1400 Everman Parkway, Fort Worth, Texas are also in the Park and adjacent to the two largest tracts of land totaling about 34 acres. The Park originally consisted of 147 acres and was purchased and developed by Oak Grove beginning in 1973. The tracts of property being acquired and buildings (if any) are described below: Size of Tract (approximate acreage) Size of Building 39,201 sq. ft. (.9 acres) 8,000 sq. ft. 151,583 sq. ft. (3.5 acres) 45,000 sq. ft. 723,956 sq. ft. (16.6 acres) * 744,599 sq. ft. (17.1 acres) * 264,712 sq. ft. (6.0 acres) * 217,809 sq. ft. (5.0 acres) * 630,422 sq. ft. (14.5 acres) * ____________ * No building The Company plans to immediately begin construction of an additional 50,000 sq. ft. of office and manufacturing space on part of the adjacent property. The remaining property will be held for future Company expansion. The Company currently leases 2500 sq. ft. in the 45,000 sq. ft. building being acquired and will continue to lease to others the balance of this building until such time as it is needed for Company purposes. Oak Grove has nine (9) years remaining under a lease for approximately 5,000 sq. ft. in this building at rates higher than similar property. The Company does not expect to renegotiate this lease. The 5000 sq. ft. building is not leased and is immediately available for use by the Company. The Company offices and plant located at 1400 Everman Parkway, were purchased in 1977 from Oak Grove by the Company prior to its spin-off from Gearhart Industries and was built by Oak Grove. In addition to the original land and building the Company has expanded on several occasions wherein it has purchased for cash additional land from Oak Grove. In arriving at the purchase price of 103,600 shares of Company Common Stock the Company received two independent appraisals of the properties of approximately $3,358,000 and $3,298,000. After additional negotiation including consideration of the differences in the appraisals, the particular value to the Company of being able to acquire much needed additional land immediately adjacent to its existing offices and plant, the purchase price was determined to be $3,345,137, less outstanding indebtedness against the property of $612,687. The Company will assume this indebtedness, therefore the net amount to be paid is $2,732,450. The closing price per share on the New York Stock Exchange of $26.375 on November 6, 1980, the date the Board authorized continued negotiations for the properties, was used in arriving at the number of shares to be given. The Company will be acquiring substantially all the properties of an operating business. There- fore summarized below is certain selected financial information as of November 30, 1980 and for the year then ended. The Company does not intend to continue to market the acquired property as part of its business but will use the property for its own needs. Sales $ 322,150 Net Loss $ (30,094) Total Assets $1,908,409 Total Liabilities $1,060,055 Total Stockholders' Equity $ 847,354 The Board of Directors recommends you vote FOR the approval of the acquisition of the property.