GVA acquires Warren Paving for $540M, secures new $600M term loan

Q: What did Granite Construction (GVA) acquire on August 5 2025?

Granite purchased Slats Lucas, LLC and Warren Paving, Inc. for $540 million in cash.

Q: How is the $540 million purchase being financed?

Funding comes from a new $600 million senior secured term loan under the amended credit facility.

Q: What are the key terms of the new credit agreement for GVA?

Facility totals $1.275 billion , matures 5 Aug 2030, priced at SOFR + 1.75 % initially, with leverage and interest-coverage covenants.

Q: How much borrowing capacity does Granite have after the deal?

Unused revolver availability is $570.4 million after accounting for $19.6 million LCs and $10 million revolver draw.

Q: When do the term loans start amortizing?

Principal payments of 2.5 % per year begin in Q4 2026, rising to 5 % annually until maturity in 2030.

[8-K] Granite Construction Inc. Reports Material Event

Filing Impact

(Moderate)

Filing Sentiment

(Neutral)

Form Type

8-K

Rhea-AI Filing Summary

Acquisition: On 5 Aug 2025 Granite Construction (GVA) executed an Equity Purchase Agreement to acquire Mississippi-based Slats Lucas, LLC and Warren Paving, Inc. for $540 million in cash, purchasing 100 % of the equity from LMS of Hattiesburg and related sellers. Funding was provided from a newly issued $600 million senior secured term loan; Granite also obtained representation-and-warranty insurance.

Financing: The company simultaneously entered into a Fifth Amended & Restated Credit Agreement featuring (1) a $600 million revolver, (2) the $600 million term loan and (3) a $75 million delayed-draw term loan, all maturing 5 Aug 2030. Initial pricing is SOFR + 1.75 % (or Base + 0.75 %) with margins and commitment fees stepping down after 31 Mar 2026 based on leverage. An accordion permits at least the greater of $535 million or 100 % of consolidated EBITDA plus unlimited additional debt if secured-debt/EBITDA 鈮�1.25脳. Pro-forma unused revolver capacity is $570.4 million. Key covenants: interest-coverage 鈮�3.0脳 and leverage 鈮�3.75脳 (4.25脳 for four quarters post large acquisition). Obligations are secured by first-priority liens and guaranteed by subsidiaries. The transaction expands Granite鈥檚 materials footprint but increases secured leverage and fixed-charge commitments.

鞚胳垬: 2025雲� 8鞗� 5鞚� Granite Construction(GVA)電� 氙胳嫓鞁滍敿鞐� 旮半皹鞚� 霊� Slats Lucas, LLC鞕€ Warren Paving, Inc.毳� 順勱笀 5鞏� 4觳滊 雼煬鞐� 鞚胳垬頃橁赴鞙勴暣欤检嫕毵るГ 瓿勳暯鞚� 觳搓舶頄堨溂氅�, LMS of Hattiesburg 氚� 甏€霠� 韺愲Г鞛愲攵€韯� 歆€攵� 100%毳� 毵れ瀰頄堨姷雼堧嫟. 鞛愱笀臁半嫭鞚€ 靸堧 氚滍枆霅� 6鞏� 雼煬攴滊鞚� 靹犾垳鞙� 雼措炒攵€鞐� 鞛リ赴雽€於�鞚� 韱淀暣鞚措（鞏挫鞙茧┌, Granite鞚€ 霕愴暅歆勳垹氚� 氤挫 氤错棙鞚� 頇曤炒頄堨姷雼堧嫟.

旮堨湹: 須岇偓電� 霃欖嫓鞐� 鞝�5彀� 靾橃爼氚� 鞛瀾靹� 鞁犾毄瓿勳暯鞚� 觳搓舶頄堨溂氅�, 鞐赴鞐愲姅 (1) 6鞏� 雼煬攴滊鞚� 須岇爠鞁犾毄頃滊弰, (2) 6鞏� 雼煬鞛リ赴雽€於�, (3) 7,500毵� 雼煬歆€鞐� 鞚胳稖鞛リ赴雽€於�鞚� 韽暔霅橃柎鞛堨溂氅�, 氇憪 2030雲� 8鞗� 5鞚� 毵岅赴鞛呺媹雼�. 齑堦赴旮堧Μ電� SOFR + 1.75% (霕愲姅旮办 旮堧Μ + 0.75%)鞚措┌, 霠堧矂毽鞐� 霐半澕 2026雲� 3鞗� 31鞚� 鞚错泟毵堨 氚� 鞎届爼靾橃垬耄岅皜雼硠鞝侅溂搿� 臧愳唽頃╇媹雼�. 頇曥灔鞓奠厴鞚€ 5鞏� 3,500毵� 雼煬 霕愲姅韱淀暕 EBITDA鞚� 100% 欷� 韥� 旮堨暋鞚挫儊鞚� 項堨毄頃橂┌, 雼措炒攵€毂�/EBITDA 鈮�1.25脳鞚� 瓴届毎氍挫牅頃� 於旉皜攵€毂勱皜臧€電ロ暕雼堧嫟. 頂勲韽ゴ毵� 氙胳偓鞖� 須岇爠鞁犾毄頃滊弰電� 5鞏� 7,040毵� 雼煬鞛呺媹雼�. 欤检殧鞎届爼臁瓣贝: 鞚挫瀽氤挫儊牍勳湪鈮�3.0脳, 霠堧矂毽 鈮�3.75脳 (雽€攴滊 鞚胳垬頉� 4攵勱赴霃欖晥 4.25脳). 毂勲電� 鞖办劆雼措炒甓岇溂搿� 雼措炒霅橂┌ 鞛愴殞靷皜氤挫頃╇媹雼�. 鞚措矆瓯半灅電� Granite鞚� 鞛愳灛靷梾鞓侅棴鞚� 頇曥灔頃橃毵� 雼措炒霠堧矂毽鞕€ 瓿犾爼牍勳毄攵€雼挫潉歃濌皜鞁滍偟雼堧嫟.

Positive

$540 M acquisition expands Granite鈥檚 construction-materials footprint in a growing Gulf Coast market.
$600 M revolver plus accordion feature provides significant liquidity and strategic flexibility.
Initial SOFR + 1.75 % margin and potential step-downs could lower interest costs as leverage falls.

Negative

Deal is 100 % debt-financed, increasing secured leverage and interest expense.
Assets are pledged under first-priority liens, reducing collateral available for future unsecured funding.
Covenants cap leverage at 3.75脳 (4.25脳 temporarily), limiting headroom if integration underperforms.

Insights

TL;DR: $540 M deal adds materials scale; leverage rises but covenants appear manageable.

The acquisition strengthens Granite鈥檚 vertically integrated construction-materials platform in the U.S. Gulf Coast, a region benefiting from infrastructure spend. Management locked in a six-year capital structure with ample liquidity鈥�$570 M of revolver capacity and option to upsize through the accordion. Initial SOFR+1.75 % pricing is competitive and can tighten if leverage declines. Covenants allow 4.25脳 leverage for four quarters post-deal, giving Granite breathing room. While interest expense will rise and assets are now pledged, EBITDA accretion could offset if Warren Paving鈥檚 margins are in line with industry averages. Overall impact is moderately positive for growth, neutral for near-term earnings until synergies and financing costs are disclosed.

TL;DR: Classic cash-and-debt carve-out with seller insurance; structure limits post-close legal risk.

Granite used representation-and-warranty insurance, reducing escrow friction and accelerating seller proceeds鈥攕tandard in current mid-market M&A but still noteworthy. The fixed 2.5 % amortization ramping to 5 % keeps annual principal below $30 M until late 2027, easing integration. Security package and expansive negative covenants mirror leveraged-loan norms, yet accordion and delayed draw add flexibility for bolt-ons. Absence of disclosed earn-outs or contingent payments simplifies accounting. Risks center on execution in a new geographic market and higher secured leverage; nonetheless, transaction terms are well-balanced.

08/06/2025 - 08:31 AM

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of report (Date of earliest event reported): August 5, 2025

GRANITE CONSTRUCTION INCORPORATED
(Exact Name of Registrant as Specified in its Charter)


Delaware (State or Other Jurisdiction of Incorporation)			1-12911 (Commission File Number)			77-0239383 (IRS Employer Identification No.)

585 West Beach Street

Watsonville, California 95076

(Address of Principal Executive Offices) (Zip Code)

Registrant’s telephone number, including area code: (831) 724-1011

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	GVA	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 1.01 Entry into a Material Definitive Agreement.

Purchase Agreement

On August 5, 2025, Granite Construction Incorporated, a Delaware corporation (the “Company”), entered into an Equity Purchase Agreement (the “Purchase Agreement”) with LMS of Hattiesburg, L.P., a Mississippi limited partnership (“LMS”), Steven M. Warren, and Melissa W. McGee (collectively, the “Sellers”) and Steven M. Warren, as representative of the Sellers. Pursuant to the Purchase Agreement, the Company purchased all of the outstanding equity interests of Slats Lucas, LLC, a Mississippi limited liability company (“Slats Lucas”) and Warren Paving, Inc., a Mississippi corporation (“Warren Paving”), from the Sellers for $540.0 million, subject to customary closing adjustments (the “Transaction”). The purchase price was paid using a portion of the proceeds from a new $600.0 million senior secured term loan, as described further below.

The Purchase Agreement contained customary representations, warranties and covenants made by each of the Sellers and the Company. The Company has obtained a representation and warranty insurance policy to provide coverage for certain breaches of representations and warranties of the Sellers, which is subject to certain exclusions, deductibles and other terms and conditions set forth therein.

The foregoing description of the Purchase Agreement is qualified in its entirety by reference to the Purchase Agreement attached as Exhibit 2.1 to this Current Report on Form 8-K and incorporated herein by reference. The Purchase Agreement is included to provide investors and security holders with information regarding its terms. It is not intended to provide any other factual information about the Company, the Sellers or any of their respective businesses, subsidiaries or affiliates. The representations, warranties and covenants contained in the Purchase Agreement (1) were made by the parties thereto only for purposes of that agreement and as of specific dates; (2) were made solely for the benefit of the parties to the Purchase Agreement; (3) may be subject to limitations agreed upon by the parties, including being qualified by disclosures made for the purposes of allocating contractual risk between the parties to the Purchase Agreement instead of establishing those matters as facts and (4) may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Moreover, information concerning the subject matter of the representations, warranties and covenants may change after the date of the Purchase Agreement, which subsequent information may or may not be fully reflected in public disclosures by the Company. Accordingly, investors should not read the representations and warranties in the Purchase Agreement in isolation, but only in conjunction with the other information about the Company and its subsidiaries that the Company includes in reports, statements and other filings it makes with the Securities and Exchange Commission.

Amendment and Restatement of Credit Agreement

The Company entered into the Fifth Amended and Restated Credit Agreement, dated as of August 5, 2025, among the Company, Granite Construction Company, and GILC Incorporated, as borrowers, Bank of America, N.A., as administrative agent, collateral agent, swing line lender and L/C issuer, and the lenders and other parties thereto (the “A&R Credit Agreement”). The A&R Credit Agreement amends and restates the Fourth Amended and Restated Credit Agreement, dated as of June 2, 2022, by and among the Company, Granite Construction Company and GILC Incorporated, as borrowers, Bank of America, N.A., as administrative agent, collateral agent, swing line lender and L/C issuer, and the lenders and other parties thereto to, among other things, provide for (1) a $600.0 million senior secured revolving credit facility (the “Revolver”), (2) a $600.0 million senior secured term loan (the “Initial Term Loan”) and (3) a senior secured term loan in an aggregate amount not to exceed $75.0 million (the “Delayed Draw Term Loan” and together with the Initial Term Loan, the “Term Loans”). The Delayed Draw Term Loan may be borrowed from the closing date of the A&R Credit Agreement until six months after the closing date (the “Term Loan Availability Period”), subject to voluntary termination by the Company of the Delayed Draw Term Loan commitments and termination of the Delayed Draw Term Loan commitments upon the occurrence of an Event of Default (as defined in the A&R Credit Agreement) at the request of or with the consent of the required lenders. The A&R Credit Agreement also includes an accordion feature that allows the Company to increase borrowings under the Revolver, request a new tranche of term loans, or issue one or more series of notes (whether issued in a public offering, Rule 144A or other private placement or purchase or otherwise) or loans or any bridge financing pursuant to financing documentation other than the A&R Credit Agreement, or a combination thereof, in an amount not to exceed (1) the greater of (a) $535.0 million and (b) the amount equal to 100% of Consolidated EBITDA (as defined in the A&R Credit Agreement), calculated on a pro forma basis, plus (2) unlimited additional amounts so long as on a pro forma basis after giving effect to the incurrence of additional indebtedness and after giving effect to all other appropriate pro forma adjustments, the ratio of consolidated funded secured indebtedness to Consolidated EBITDA (as defined in the A&R Credit Agreement) does not exceed 1.25 to 1.0, in each case, subject to lender approval.

The A&R Credit Agreement includes a $150.0 million sublimit for letters of credit ($75.0 million for financial letters of credit) and a $20.0 million sublimit for swingline loans. As of the date hereof, the total unused availability under the Revolver is $570.4 million, resulting from $19.6 million in issued and outstanding letters of credit and $10.0 million of outstanding revolving loans, and the $600.0 million Initial Term Loan is outstanding.

The Company may borrow under the A&R Credit Agreement, at its option, at either (a) a term Secured Overnight Financing Rate (“SOFR”) plus an applicable margin initially and through the delivery of the March 31, 2026 compliance certificate of 1.75% and then ranging from 1.25% to 2.0%, or (b) a base rate plus an applicable margin initially and through the delivery of the March 31, 2026 compliance certificate of 0.75% and then ranging from 0.25% to 1.0%. After delivery of the March 31, 2026 compliance certificate,

the applicable margin will be based on our consolidated leverage ratio set forth on the most recent compliance certificate delivered quarterly. In addition, the Company has agreed to pay an unused commitment fee initially and through the delivery of the March 31, 2026 compliance certificate of 0.300% and then ranging from 0.175% to 0.350%, depending on the Company’s consolidated leverage ratio set forth on the most recent compliance certificate delivered quarterly. Further, during the Term Loan Availability Period, the Company has agreed to pay a ticking fee ranging from 0.175% to 0.350%, depending on the Company’s consolidated leverage ratio, on the amount by which the commitment for Term Loans of $675.0 million exceeds the amount of outstanding Term Loans. The ticking fee will be payable beginning on the 60th day after closing and during the Term Loan Availability Period or until the Delayed Draw Term Loan is made.

The Term Loans will mature on August 5, 2030 (the “Maturity Date”) and will amortize at 2.5% per year payable in quarterly installments beginning with the quarter ending December 31, 2026 through September 30, 2027 and increasing to 5.0% per year payable in quarterly installments until the Maturity Date. The Revolver also matures on the Maturity Date, and no letters of credit issued under the A&R Credit Agreement can have an expiration later than seven days prior to the Maturity Date unless cash collateral arrangements acceptable to the letter of credit issuer have been made.

The financial covenants contained in the A&R Credit Agreement require the maintenance of a minimum consolidated interest coverage ratio of no less than 3.00 to 1.00 and a maximum consolidated leverage ratio of no more than 3.75 to 1.00 (or 4.25 to 1.00 for each of the four consecutive fiscal quarters ending after any acquisition permitted under the A&R Credit Agreement occurs for cash consideration in excess of $100.0 million).

The A&R Credit Agreement contains certain other restrictive covenants that limit the Company’s ability, among other things, to incur certain liens, make certain types of investments, incur additional indebtedness, change the nature of the Company’s business or operations, merge, consolidate, or combine with other entities, sell assets, or make certain payments.

The Company’s obligations under the A&R Credit Agreement are guaranteed by certain of the Company’s subsidiaries and are secured by first priority liens on substantially all of the assets, other than real property, of the Company and the Company’s subsidiaries that are guarantors or borrowers under the A&R Credit Agreement.

The obligations of the Company under the A&R Credit Agreement may be accelerated upon the occurrence of an Event of Default. Events of Default include customary events for a financing agreement of this type, including, without limitation, payment defaults, a material inaccuracy of representations and warranties, defaults in the performance of certain affirmative and negative covenants, defaults on certain other indebtedness of the Company or its subsidiaries, bankruptcy or related defaults, defaults related to certain judgments and the occurrence of a Change in Control (as defined in the A&R Credit Agreement).

The guaranty arrangements under the A&R Credit Agreement were amended and restated pursuant to the Fifth Amended and Restated Guaranty Agreement, dated August 5, 2025, by and among the Company, certain subsidiaries of the Company party thereto as guarantors and Bank of America, N.A., as administrative agent (the “A&R Guaranty Agreement”).

The foregoing description of the A&R Credit Agreement and the A&R Guaranty Agreement is qualified in its entirety by reference to the A&R Credit Agreement and the A&R Guaranty Agreement attached as Exhibit 10.1 and Exhibit 10.2, respectively, to this Current Report on Form 8-K and incorporated herein by reference.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information regarding the A&R Credit Agreement and the A&R Guaranty Agreement set forth under Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.


Exhibit No.						Description
2.1						Equity Purchase Agreement, dated August 5, 2025 by and among Granite Construction Incorporated, LMS of Hattiesburg, L.P., Steven M. Warren, Melissa W. McGee and Steven M. Warren, as sellers’ representative.
10.1						Fifth Amended and Restated Credit Agreement, dated as of August 5, 2025, by and among Granite Construction Incorporated, Granite Construction Company and GILC Incorporated, as borrowers, Bank of America, N.A., as administrative agent, collateral agent, swing line lender and L/C issuer, and the lenders and other parties thereto.
10.2						Fifth Amended and Restated Guaranty Agreement, dated as of August 5, 2025, by and among Granite Construction Incorporated, the other guarantors party thereto and Bank of America, N.A., as administrative agent.
104						Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


			GRANITE CONSTRUCTION INCORPORATED


			By:			/s/ Staci M. Woolsey
						Staci M. Woolsey
						Executive Vice President and Chief Financial Officer

Date: August 6, 2025

Source:

FAQ

What did Granite Construction (GVA) acquire on August 5 2025?

Granite purchased Slats Lucas, LLC and Warren Paving, Inc. for $540 million in cash.

How is the $540 million purchase being financed?

Funding comes from a new $600 million senior secured term loan under the amended credit facility.

What are the key terms of the new credit agreement for GVA?

Facility totals $1.275 billion, matures 5 Aug 2030, priced at SOFR + 1.75 % initially, with leverage and interest-coverage covenants.

How much borrowing capacity does Granite have after the deal?

Unused revolver availability is $570.4 million after accounting for $19.6 million LCs and $10 million revolver draw.

When do the term loans start amortizing?

Principal payments of 2.5 % per year begin in Q4 2026, rising to 5 % annually until maturity in 2030.

AG真人官方

[8-K] Granite Construction Inc. Reports Material Event

Insights

FAQ

What did Granite Construction (GVA) acquire on August 5 2025?

How is the $540 million purchase being financed?

What are the key terms of the new credit agreement for GVA?

How much borrowing capacity does Granite have after the deal?

When do the term loans start amortizing?

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AG真人官方

Trending News

[8-K] Granite Construction Inc. Reports Material Event

Insights

Senior Equity Analyst positive

M&A Specialist neutral

FAQ

What did Granite Construction (GVA) acquire on August 5 2025?

How is the $540 million purchase being financed?

What are the key terms of the new credit agreement for GVA?

How much borrowing capacity does Granite have after the deal?

When do the term loans start amortizing?

NYSE:GVA

GVA Rankings

GVA Latest News

GVA Latest SEC Filings

GVA Stock Data