Granite Construction to Acquire Layne Christensen
Granite Construction Incorporated and Layne Christensen Company today announced they have entered into a definitive agreement whereby Granite will acquire all of the outstanding shares of Layne in a stock-for-stock transaction valued at $565 million, including the assumption of net debt. The transaction, which was unanimously approved by the Boards of Directors of both companies, is expected to close in the second quarter of 2018.
As a leading water management, construction, and drilling company with the #1 position in well drilling and a #2 position in cured-in-place pipe (CIPP) rehabilitation, Layne significantly enhances Granite’s presence in the water infrastructure market. The combined company, including Granite’s existing water business, is expected to have water-related revenues of approximately $600 million.
“This strategic transaction brings together two complementary organizations to create a platform for growth, delivering significant benefits for shareholders, employees, and customers,” said James H. Roberts, President and Chief Executive Officer of Granite Construction. “With Layne’s expertise and leading water positions, Granite will advance its goal of becoming a full suite provider of construction and rehabilitation services for the water and wastewater market. With enhanced scale and capabilities, Granite will be better positioned to address the growing water and wastewater needs throughout the infrastructure lifecycle.”
Under the terms of the agreement, Granite will assume outstanding Layne convertible debt with principal value of $170 million and honor the terms and existing maturity date provisions of the indentures. The company also expects to fund the cash financing requirements of the transaction through a combination of existing cash and availability under its revolving credit facility.
The transaction is subject to the satisfaction of customary closing conditions, including applicable regulatory approvals and the approval of Layne shareholders. In connection with the transaction, Granite will issue approximately 5.4 million shares of Granite common stock to Layne common stockholders.
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