Granite Acquires Lehman-Roberts, Memphis Stone & Gravel

Granite Construction announced the acquisition of Lehman-Roberts Co, ( LRC) and Memphis Stone & Gravel Co. (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.

“This is just another example of not just consolidation, but also companies stepping out into new geographies as the opportunities in their home markets become less and less,” said Pierre Villere of Allen-Villere Partners, the premier mergers and acquisition advisors-and-valuation-services firm to the construction materials industry. “We have seen Canadian companies enter Texas, and super regionals continuing to expand. Midwestern-base Farmer Companies just entered California, for example. We expect to see more of this trend in the near future.”

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