WATSONVILLE, Calif.--(BUSINESS WIRE)-- Granite Construction Incorporated (NYSE:GVA) announced today that it has acquired LiquiForce, a privately-owned company which serves public and private sector water and wastewater customers in both Canada and the U.S. Today, LiquiForce provides a variety of underground contracting services including lateral liner rehabilitation, mainline Cured-in-Place Pipe (CIPP), project management, manhole rehabilitation, and mainline point repairs. In addition, they are recognized as a leader for their patented LiquiForce Junction Lateral Liner. Through this acquisition, we welcome more than 100 employees to the Granite team. Going forward, LiquiForce will continue to operate from offices in Kingsville, Ontario, Hamilton, Ontario, and Romulus, Michigan. The transaction is expected to be immediately accretive to Granite’s 2018 earnings per share.
“This acquisition represents the next chapter in Granite’s strategic plan, as we continue to diversify and grow our business,” said James H. Roberts, President and Chief Executive Officer of Granite. “This move positions Granite to build on our capabilities as a national leader in CIPP lining technology and trenchless pipe rehabilitation.
“The addition of LiquiForce also is in alignment with our recent announcement to acquire Layne Christensen. As we consolidate and grow our position in the attractive water and wastewater sector, Granite has significant opportunities to capture a larger share of the market and accelerate our growth prospects,” Roberts continued. “These strategic transactions represent a combination of complementary organizations which create a platform for growth, delivering meaningful benefits for shareholders, employees, and customers. We expect value creation for shareholders in both the near- and long-term, including earnings accretion and synergy realization.
“This deal highlights some of the exciting opportunities for profitable growth ahead for Granite. We are proud to add a deep bench of trenchless and CIPP industry veterans who have developed industry leading technology,” said Roberts. “Combined with our existing Kenny Underground business, the LiquiForce addition provides a highly complementary set of trenchless rehabilitation solutions and expertise to Granite's existing portfolio, allowing us to better serve clients.”
Roberts concluded, “Importantly, LiquiForce is a company that not only complements our customer and project portfolio, it also shares Granite’s values. Employees will have opportunities to grow into new roles and learn about new businesses as part of a larger, more diversified company. Together we will profitably grow our business, across geographies, delivering a broadening portfolio of services and the high-quality products and services that Granite and LiquiForce clients have come to expect.”
Financial terms of this cash deal are undisclosed. LiquiForce today is an approximately $40-million annual revenue run-rate business with low double-digit EBITDA margins. This is an all-cash deal, and Granite will use its revolving credit facility for financing, while also in the process of increasing the revolving credit facility to provide for future growth opportunities. Granite’s balance sheet remains strong, with access to sufficient capital to continue to execute our strategic plan.
Financial close of the transaction was today, April 3, 2018. One-time costs related to the acquisition of LiquiForce are estimated to be less than $1 million and will be recorded in the second quarter of 2018.
Through its offices and subsidiaries nationwide, Granite (NYSE:GVA) is one of the nation’s largest infrastructure contractors and construction materials producers. Granite specializes in complex infrastructure projects, including transportation, industrial and federal contracting, and is a proven leader in alternative procurement project delivery. Granite is an award-winning firm in safety, quality and environmental stewardship, and has been honored as one of the World’s Most Ethical Companies by Ethisphere Institute for nine consecutive years. Granite is listed on the New York Stock Exchange and is part of the S&P MidCap 400 Index, the MSCI KLD 400 Social Index and the Russell 2000 Index. For more information, visit graniteconstruction.com.
Source: Granite Construction Incorporated
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