Granite to Acquire Kenny Construction Company

  Granite to Acquire Kenny Construction Company

  *Expands Granite’s presence in the power, tunnel and water/underground
  *Combined capabilities and footprint create significant incremental
    opportunities for both companies

Business Wire

WATSONVILLE, Calif. -- December 28, 2012

Granite Construction Incorporated (NYSE: GVA) announced today that it has
signed a definitive agreement to acquire Kenny Construction Company (“Kenny”),
a national contractor and construction manager specializing in the power,
tunnel, water and civil markets, for $130 million.

Founded in 1927, Kenny is a privately-owned, Northbrook, Illinois-based
company with approximately 425 employees. Kenny offers a comprehensive range
of services related to power transmission and distribution, construction
management, tunnels, trenchless and underground utilities and heavy-civil
infrastructure. Kenny’s revenues are projected to be $270 million for 2012
with approximately 50% of revenues associated with the power sector, 20%
associated with tunneling-related work and 30% coming from water/underground
and other heavy/civil related work. As of December 31, 2012, Kenny’s backlog
is projected to be approximately $390 million.

“This acquisition is an important milestone for Granite as we continue to
execute on our strategic plan to diversify, strengthen and grow our business,”
said James H. Roberts, Granite’s president and chief executive officer. “The
addition of Kenny’s expertise in the power, tunnel and underground markets
will significantly expand our presence in these key areas as well as enable us
to leverage our capabilities and geographic footprint to take advantage of
opportunities across the country.”


Under the terms of the definitive agreement, Granite will pay the purchase
price of $130 million in cash at closing in exchange for 100% of the
outstanding shares of Kenny. The purchase price is subject to adjustment for
certain items, including any outstanding Kenny indebtedness. Granite will
receive a tax “step up” in the assets of Kenny and its subsidiaries that is
expected to provide future tax benefits to Granite. These benefits imply an
effective purchase price of 5.0x Kenny’s projected 2012 EBITDA.

Granite intends to finance the transaction through a combination of cash and
available borrowings under its existing revolving credit facility. The
transaction has been closed in escrow and will become effective on December
31, 2012. One-time costs related to the acquisition of Kenny are estimated to
be approximately $5 million and will be recorded in the fourth quarter 2012.

Including integration costs and the impact of intangible amortization, the
transaction is expected to be break-even to Granite’s 2013 earnings per share.
Excluding intangible asset amortization, the transaction would be immediately
accretive. These projections are based on preliminary estimates of the
allocation of purchase price intangible assets. The final allocation will be
determined after closing.

BofA Merrill Lynch is acting as financial advisor to Granite in connection
with the transaction. FMI Corporation is acting as financial advisor to Kenny.

Conference Call

Granite will conduct a conference call today, December 28, 2012 at 8 a.m.
Pacific time/11 a.m. Eastern time to discuss the transaction. Access to a live
audio webcast and slide presentation is available at The live conference call may be
accessed by calling (877) 643-7158. The conference ID for the live call is
85325388. The call will be recorded and will be available for replay
approximately two hours after the live audio webcast through January 3, 2013
by calling (855) 859-2056. The conference ID for the replay is also 85325388.

About Granite

Granite is one of the nation’s leading infrastructure contractors and is
member of the S&P 400 Midcap Index, the FTSE KLD 400 Social Index and the
Russell 2000 Index. Through its wholly owned subsidiary, Granite is one of the
nation’s largest diversified heavy civil contractors and construction
materials producers serving public- and private-sector clients nationwide. In
addition, Granite has one of the oldest and most robust ethics and compliance
programs in the industry. The Company has been recognized by the Ethisphere
Institute as one of the World’s Most Ethical Companies for the third year in a
row. For more information, please visit

Forward-looking Statements

Any statements contained in this news release that are not based on historical
facts, including statements regarding future events, occurrences,
circumstances, activities, performance, outcomes and results, constitute
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements are identified
by words such as “future,” “outlook,” “assumes,” “believes,” “expects,”
“estimates,” “anticipates,” “intends,” “plans,” “appears,” “may,” “will,”
“should,” “could,” “would,” “continue,” and the negatives thereof or other
comparable terminology or by the context in which they are made. These
forward-looking statements are estimates reflecting the best judgment of
senior management and reflect our current expectations regarding future
events, occurrences, circumstances, activities, performance, outcomes and
results. These expectations may or may not be realized. Some of these
expectations may be based on beliefs, assumptions or estimates that may prove
to be incorrect. In addition, our business and operations involve numerous
risks and uncertainties, many of which are beyond our control, which could
result in our expectations not being realized or otherwise materially affect
our business, financial condition, results of operations, cash flows and
liquidity. Such risks and uncertainties include, but are not limited to, those
described in greater detail in our filings with the Securities and Exchange
Commission, particularly those specifically described in our Annual Report on
Form 10-K under “Item 1A. Risk Factors” and Quarterly Reports on Form 10-Q
under “Part II, Item 1A. Risk Factors.”

Due to the inherent risks and uncertainties associated with our
forward-looking statements, the reader is cautioned not to place undue
reliance on them. The reader is also cautioned that the forward-looking
statements contained herein speak only as of the date of this news release
and, except as required by law, we undertake no obligation to revise or update
any forward-looking statements for any reason.


Granite Construction Incorporated
Jacque Fourchy, 831-761-4741
Press spacebar to pause and continue. Press esc to stop.