Granite Construction Expands Home Markets with Warren Paving and Papich Construction Acquisitions

Granite Construction has completed the acquisition of Warren Paving and Papich Construction for $710 million, expanding its vertically-integrated home markets and increasing aggregate reserves by 30% and annual production by 27%. The acquisitions are projected to contribute $425 million in revenue annually with an adjusted EBITDA margin of 18%. The transactions are expected to enhance Granite's operational scale and create new commercial synergies.

Granite Construction has completed two strategic acquisitions, Warren Paving and Papich Construction, for a combined purchase price of $710 million. These acquisitions aim to strengthen Granite's vertically-integrated home markets and increase aggregate reserves and annual production. The deals are expected to contribute approximately $425 million in revenue annually with an adjusted EBITDA margin of 18%, according to the company's announcement [1].

The acquisition of Warren Paving, a leading aggregates producer, adds over 400 million tons of aggregate reserves and resources to Granite's portfolio. Warren Paving's operations include one quarry, one sand and gravel operation, 11 aggregate yards, three asphalt plants, and a fleet of 168 owned and leased barges. This acquisition is expected to generate annual revenue and adjusted EBITDA of approximately $275 million and $52 million, respectively, representing an expected adjusted EBITDA margin of approximately 19% [1].

Papich Construction, a specialist in infrastructure projects, brings a gravel mine, two quarries, and two asphalt plants to Granite. This acquisition is expected to enhance Granite's position in California's Central Coast and Central Valley. Together, these acquisitions are expected to increase Granite's aggregate reserves and resources by approximately 30% and annual aggregate production by approximately 27% [1].

The acquisitions are expected to be immediately accretive to adjusted EBITDA margins, with an estimated annual uplift of approximately 60 basis points driven by increased aggregates exposure. Granite's pro forma net leverage ratio for an annual period, inclusive of the acquisitions, is well below its target of 2.5x, indicating a strong financial position to continue investing in organic growth and strategic acquisitions [1].

Granite has financed the acquisitions 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. The company expects to continue executing on high-quality M&A transactions while maintaining a prudent leverage ratio [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 [1].

References:
[1] https://www.graniteconstruction.com/newsroom/granite-completes-acquisitions-warren-paving-and-papich-construction-strengthen-and-expand