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Acquisitions
 9 Months Ended
Sep. 30, 2025
Business Combination [Abstract]  
Acquisitions Acquisitions
Warren Paving Acquisition
On August 5, 2025, we completed the acquisition of Slats Lucas, LLC and Warren Paving, Inc. (collectively, “Warren Paving”) for $540.0 million in cash, subject to customary closing adjustments. We purchased all of the outstanding equity interests in Warren Paving, which is a vertically-integrated asphalt contractor and aggregate producer with operations along the Gulf Coast and Mississippi River. This acquisition aligns with our strategy to expand our presence into new geographies with future growth opportunities while supporting our existing operations, particularly the Materials segment. Warren Paving’s customers are in both the public and private sectors. We have accounted for this transaction in accordance with ASC Topic 805, Business Combinations (“ASC 805”).
Warren Paving's results have been included in the Construction and Materials segments since the acquisition date. Revenue attributable to Warren Paving for the three and nine months ended September 30, 2025 was $59.7 million. Gross profit attributable to Warren Paving for the three and nine months ended September 30, 2025 was $13.0 million.
Preliminary Purchase Price Allocation
In accordance with ASC 805, the preliminary purchase price was allocated to assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date, as presented in the table below. This purchase price allocation is preliminary and has not been finalized due to the recent timing of the acquisition, as certain information is pending as of the date of this filing to finalize estimates of fair value of certain assets acquired and liabilities assumed. As we continue to integrate the acquired business, we may obtain additional information on the acquired tangible and identifiable intangible net assets which, if significant, may require revisions to preliminary valuation assumptions, estimates and the resulting fair values presented herein. We expect to finalize these amounts within 12 months from the acquisition date.
The following table presents the preliminary purchase price allocation:
(in thousands)
Assets:
Cash and cash equivalents$4,217 
Receivables39,120 
Contract assets609 
Inventories28,425 
Other current assets112 
Property and equipment419,079 
Right of use assets55,767 
Other noncurrent assets4,436 
Total tangible assets551,765 
Identifiable intangible assets46,600 
Liabilities:
Accounts payable19,139 
Contract liabilities2,218 
Accrued expenses and other current liabilities14,682 
Long-term lease liabilities47,353 
Deferred income taxes, net103,760 
Other long-term liabilities7,000 
Total liabilities assumed194,152 
Total tangible and identifiable net assets acquired404,213 
Goodwill137,749 
Preliminary purchase price (1)$541,962 
(1)The preliminary purchase price includes customary closing adjustments.
Goodwill
Goodwill represents the excess of the purchase price over the fair value of the underlying net tangible and intangible assets. The factors that contributed to the recognition of goodwill from this acquisition include strengthening and expanding our vertically-integrated Southeast home market and the assembled workforce. We recorded $137.7 million of goodwill, none of which is tax deductible. Of the acquired goodwill, $24.7 million was allocated to the Construction segment and $113.0 million was allocated to the Materials segment.
Identifiable Intangible Assets
The following table lists identifiable intangible assets from the Warren Paving acquisition that are included in intangible assets in the condensed consolidated balance sheets as of September 30, 2025 (in thousands):
Useful Lives (Years)Gross ValueAccumulated AmortizationNet Value
Customer relationships20$12,500 $(104)$12,396 
Trademarks/trade name109,700 (162)9,538 
Permits1020,000 (333)19,667 
Backlog14,400 (518)3,882 
Total intangible assets$46,600 $(1,117)$45,483 
The amortization expense related to the acquired identifiable intangible assets for the three and nine months ended September 30, 2025 was included in cost of revenue and selling, general and administrative expenses in the condensed consolidated statements of operations. All of the acquired identifiable intangible assets will be amortized on a straight-line
basis. Amortization expense related to the acquired identifiable intangible asset balances at September 30, 2025 is expected to be recorded in the future as follows: $1.7 million in the remainder of 2025; $6.7 million in 2026, $3.6 million in each year from 2027 to 2030; and $22.7 million thereafter.
Pro Forma Financial Information
The unaudited pro forma financial information in the table below summarizes the combined results of operations of Granite and Warren Paving as though the companies had been combined as of January 1, 2024. The pro forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place on January 1, 2024, nor does it intend to be a projection of future results.
Three Months Ended September 30,Nine Months Ended September 30,
(unaudited, in thousands)
2025202420252024
Revenue$1,464,436 $1,337,974 $3,408,831 $3,210,608 
Net income attributable to Granite Construction Incorporated
$111,068 $74,902 $147,580 $61,114 
These amounts have been calculated after applying Granite’s accounting policies and adjusting the results of Warren Paving to reflect the additional depreciation and amortization that would have been recorded assuming the fair value adjustments to property and equipment and intangible assets had been applied starting on January 1, 2024. Additionally, these amounts reflect adjustment for additional interest that would have been incurred as result of incurring debt for the acquisition over the periods in the pro forma financial information. Acquisition-related expenses related to Warren Paving that were incurred during the three and nine months ended September 30, 2025 are reflected in the nine months ended September 30, 2024 due to the assumed timing of the transaction. The statutory tax rate of 26% was used for both 2025 and 2024 for the pro forma adjustments.
During the three and nine months ended September 30, 2025, we incurred $11.5 million and $12.5 million, respectively, of acquisition-related costs associated with the Warren Paving acquisition which were primarily related to professional services and located in Other costs, net on the Condensed Consolidated Statement of Operations.
Papich Construction Acquisition
On August 5, 2025, we completed the acquisition of Papich Construction Company, Inc. (“Papich Construction”) for $170.0 million in cash, subject to customary closing adjustments. We purchased all of the issued and outstanding common stock of Papich Construction, which is a provider of construction services and materials in California’s Central Coast and Central Valley regions. This acquisition aligns with our strategy of enhancing our vertical integration by strengthening our existing home markets. Papich Construction’s customers are in both the public and private sectors.
Papich Construction's results have been included in the Construction and Materials segments since the acquisition date. Revenue attributable to Papich Construction for the three and nine months ended September 30, 2025 was $38.7 million. Gross profit attributable to Papich Construction for the three and nine months ended September 30, 2025 was $3.8 million.
Preliminary Purchase Price Allocation
In accordance with ASC 805, the preliminary purchase price was allocated to assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date, as presented in the table below. This purchase price allocation is preliminary and has not been finalized due to the recent timing of the acquisition, as certain information is pending as of the date of this filing to finalize estimates of fair value of certain assets acquired and liabilities assumed. As we continue to integrate the acquired business, we may obtain additional information on the acquired tangible and identifiable intangible net assets which, if significant, may require revisions to preliminary valuation assumptions, estimates and the resulting fair values presented herein. We expect to finalize these amounts within 12 months from the acquisition date.
For the purpose of this allocation, the contractual purchase price has been adjusted to include customary closing adjustments, resulting in a preliminary purchase price of $173.4 million. Based on our preliminary purchase price allocation, the net tangible and identifiable intangible assets acquired were $119.0 million and $15.6 million, respectively, resulting in acquired goodwill of $38.8 million, all of which is expected to be tax deductible. The identifiable intangible assets acquired consisted of backlog, permits and customer relationships. Of the acquired goodwill, $5.3 million is in the Materials segment and $33.5 million is in the Construction segment. The most significant assets acquired were $85.8 million of property and equipment and $33.6 million of accounts receivable.
The factors that contributed to the recognition of goodwill from this acquisition include the strengthening of our vertically-integrated California home market and the assembled workforce.
Pro Forma Financial Information
The unaudited pro forma financial information in the table below summarizes the combined results of operations of Granite and Papich Construction as though the companies had been combined as of January 1, 2024. The pro forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place on January 1, 2024, nor does it intend to be a projection of future results.
Three Months Ended September 30,Nine Months Ended September 30,
(unaudited, in thousands)
2025202420252024
Revenue$1,452,705 $1,319,863 $3,364,348 $3,133,256 
Net income attributable to Granite Construction Incorporated
$104,014 $79,401 $148,374 $87,475 
These amounts have been calculated after applying Granite’s accounting policies and adjusting the results of Papich Construction to reflect the additional depreciation and amortization that would have been recorded assuming the fair value adjustments to property and equipment and intangible assets had been applied starting on January 1, 2024. Additionally, these amounts reflect adjustment for additional interest that would have been incurred as result of incurring debt for the acquisition over the periods in the pro forma financial information. Acquisition-related expenses related to Papich Construction that were incurred during the three and nine months ended September 30, 2025 are reflected in the nine months ended September 30, 2024 due to the assumed timing of the transaction. The statutory tax rate of 26% was used for both 2025 and 2024 for the pro forma adjustments.
During the three and nine months ended September 30, 2025, we incurred $1.5 million and $3.1 million, respectively, of acquisition-related costs associated with the Papich Construction acquisition which were primarily related to professional services and located in Other costs, net on the Condensed Consolidated Statement of Operations.
Dickerson & Bowen, Inc.
On August 9, 2024, we completed the acquisition of Dickerson & Bowen, Inc. (“D&B”) for $125.5 million in cash, subject to customary closing adjustments. D&B is an aggregates, asphalt and highway construction company serving central and southern Mississippi which expanded our footprint in that region. D&B’s customers are in both the public and private sectors.
D&B's results have been included in the Construction and Materials segments since the acquisition date. Revenue attributable to D&B for the three and nine months ended September 30, 2025 was $21.3 million and $59.6 million, respectively. Gross profit attributable to D&B for the three and nine months ended September 30, 2025 was $3.1 million and $8.0 million, respectively.
Purchase Price Allocation
In accordance with ASC 805, the purchase price was allocated to assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. For the purpose of the purchase price allocation, the contractual purchase price has been adjusted to exclude $4.0 million in cash acquired and include closing adjustments, resulting in an updated purchase price of $121.2 million. The tangible and identifiable intangible assets acquired, net of liabilities assumed, were $24.9 million and $27.9 million, respectively. This generated acquired goodwill of $68.4 million, none of which is tax deductible. The most significant assets acquired were $38.1 million of property and equipment and an $18.2 million customer relationships intangible asset.
During the nine months ended September 30, 2025, we made immaterial measurement period adjustments to reflect facts and circumstances in existence as of the acquisition date. We finalized the purchase price allocation during the third quarter of 2025.