Granite Construction announced the completion of two strategic acquisitions: Warren Paving and Papich Construction, for a combined purchase price of $710 million. These acquisitions are expected to contribute approximately $425 million in annual revenue with an anticipated adjusted EBITDA margin of approximately 18%.
The acquisition of Warren Paving, a leading aggregates producer, adds over 400 million tons of aggregate reserves and resources, along with a network of strategically located assets in the Mississippi River and Gulf Coast regions. This includes one quarry, one sand and gravel operation, 11 aggregate yards, three asphalt plants, and a fleet of 168 barges.
Papich Construction specializes in infrastructure projects and supplies asphalt and aggregates products, including a gravel mine, two quarries, and two asphalt plants. These acquisitions significantly strengthen Granite's vertically integrated home markets and are expected to be immediately accretive to adjusted EBITDA margins.
The acquisitions were financed through a new 5-year $600 million term loan, $100 million of cash on hand, and $10 million drawn on an upsized $600 million revolver. Granite's pro forma net leverage ratio remains well below its target of 2.5x, demonstrating prudent financial management for this substantial expansion.
The content on BeyondSPX is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.