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Acquisition expands Granite's footprint and creates a new platform for growth in the attractive greater Memphis metropolitan market
Granite Construction Incorporated (NYSE:GVA) today announced the acquisition of Lehman-Roberts Company ("LRC") and Memphis Stone & Gravel Company ("MSG"), longstanding asphalt paving and asphalt and aggregates producers and suppliers. This acquisition expands Granite's footprint and creates a new growth platform for Granite in the attractive Memphis metropolitan market. LRC operates seven strategically located asphalt plants serving the greater Memphis area and northern Mississippi. MSG operates three sand and gravel mines, with an additional mine under construction. MSG has exclusive rights to an estimated 57 million tons of proven and probable reserves and 24 million tons of measured and indicated reserves. The companies' senior leadership team, led by Pat Nelson, will remain in place to manage and develop the business as part of the Granite group of companies.
"We are very excited to complete this acquisition of an outstanding materials-led business that expands our footprint in the Southeast. We believe their business model aligns with our previously disclosed strategy to grow our business by focusing on developing home markets that are served by highly successful companies of scale with great leadership," said Kyle Larkin, Granite President and Chief Executive Officer.
Larkin continued, "With the completion of the acquisition, we are increasing our 2024 revenue target to a revenue range of $3.8 billion to $4.0 billion. While we expect the acquisition to be accretive to EBITDA, we are maintaining our 2024 adjusted EBITDA margin range of 9% to 11%."
MSG and LRC President, Pat Nelson, stated, "We are excited to join Granite as we enter the next phase of our evolution. We look forward to continuing to provide our many valued customers with the highest quality aggregates and service for many years to come."
The acquisition was financed through a new term loan of $150 million maturing on June 2, 2027, with the remainder funded through Granite's existing revolver and cash on hand.
The Company does not provide a reconciliation of forward-looking adjusted EBITDA margin to the most directly comparable forward-looking GAAP measure of net income attributable to Granite Construction Incorporated because the Company cannot predict with a reasonable degree of certainty and without unreasonable efforts certain excluded items that are inherently uncertain and depend on various factors. For these reasons, we are unable to assess the probable significance of the unavailable information.
Posted In: GVA
