Knife River Corp. has entered into a definitive agreement to acquire Strata Corp., a leading construction materials and contracting services provider in North Dakota and northwestern Minnesota. Based on Strata’s projected 2025 Adj. EBITDA, the purchase price of $454 million reflects a multiple in the high single digits.
Founded in 1910, Strata is an aggregates-based, vertically integrated company with more than 75 aggregates locations, extensive aggregate reserves and rail assets to bring those reserves to market.
The company has 28 ready-mix plants, three asphalt plants and a contracting services division that specializes in asphalt paving and concrete construction. Strata is headquartered in Grand Forks, N.D., and will provide infill growth for Knife River’s Central Segment.
“Strata is respected among its peers and in its communities, and is well-known for its strong culture and expertise,” said Knife River President and CEO Brian Gray. “It is a great success story – growing from a single gravel operation into a leading supplier of construction materials that employs over 900 team members during the peak season. We look forward to completing the transaction and welcoming the Strata team to the Life at Knife.”
The transaction is expected to close in the first half of 2025, subject to regulatory approval and customary closing conditions. Knife River expects to use cash on hand and the proceeds from the issuance of long-term debt to finance the acquisition.
“We believe this acquisition is a prime example of our ‘Competitive EDGE’ strategy to profitably grow our business,” Gray said. “We expect Strata to be accretive to Knife River’s Adj. EBITDA margin within the first year. Strata’s high-quality assets allow us to expand our service territory within a region we know well. We believe this is a great, long-term fit for us.”
Strata was founded 114 years ago as Bradshaw Gravel Supply. Majority shareholder James Bradshaw oversaw much of the company’s growth during his 46 years as president.
“It’s not easy building a family business and it’s even harder coming to the point where you are ready to step away from it,” said Bradshaw, Strata’s chairman and CEO. “I believe there is a great fit between Strata and Knife River. Both companies are strongly aligned with our cultures of putting people first and operating with integrity. We want what is best for our team and their future, and we believe that is with Knife River.”