Granite Construction Acquires Warren Paving and Papich Construction for $710 Million

Granite Construction continues its acquisition spree with the purchase of Warren Paving and Papich Construction for $710 million. The acquisitions expand Granite's materials business in the Southeast and California, respectively, and reflect the company's bullishness on public and private infrastructure work and the booming data center market. The additions are expected to add approximately $425 million to Granite's revenue annually, raising its 2025 revenue guidance to between $4.35 billion and $4.55 billion.

Granite Construction (NYSE: GVA) has announced the completion of two significant acquisitions: Warren Paving and Papich Construction. The acquisitions, totaling $710 million, aim to bolster Granite's vertically-integrated home markets and reflect its strategic focus on public and private infrastructure projects, as well as the booming data center market.

Warren Paving, a leading aggregates producer in the Southeast, brings over 400 million tons of aggregate reserves and resources to Granite. This acquisition enhances Granite's presence in Mississippi and the Gulf Coast regions of Louisiana and Alabama, with annual revenue and adjusted EBITDA projections of approximately $275 million and $52 million, respectively [1].

Papich Construction, based in California, specializes in infrastructure projects and supplies both internal projects and third-party customers with a full suite of asphalt and aggregates products. This acquisition includes a gravel mine, two quarries, and two asphalt plants, strengthening Granite's position in California's Central Coast and Central Valley. The expected annual revenue and adjusted EBITDA from Papich Construction are approximately $150 million and $20 million, respectively [1].

These acquisitions are expected to contribute approximately $425 million in annual revenue to Granite, raising its 2025 revenue guidance to between $4.35 billion and $4.55 billion [1]. The acquisitions are also anticipated to be immediately accretive to adjusted EBITDA margins, with an estimated annual uplift of approximately 60 basis points [1].

Granite's strong balance sheet and robust acquisition pipeline have positioned it to continue investing in organic growth and strategic acquisitions. The company's pro forma net leverage ratio for an annual period, inclusive of the acquisitions, remains well below its target of 2.5x [1].

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 revolver of $600 million [1].

Further details on these transactions, as well as second quarter results and revised 2025 guidance, will be provided on Granite's next earnings call on Thursday, August 7, 2025, at 8:00 am Pacific Time.

References:
[1] https://www.morningstar.com/news/business-wire/20250805206914/granite-completes-acquisitions-of-warren-paving-and-papich-construction-to-strengthen-and-expand-vertically-integrated-home-markets