Granite Construction Continues Business Expansion with LiquiForce Buy

LiquiForce cured-in-place pipe lining technology expected to lift recently acquired Layne Christensen’s No. 2 position in CIPP water/wastewater rehab

Granite Layne Liqui Force

Granite Construction Inc. GVA acquired privately owned LiquiForce, which is considered as a leader for its patented LiquiForce Junction Lateral Liner. Notably, Liquiforce serves public as well as private sector water and wastewater customers in both Canada and the United States. This acquisition is a step forward from Granite Construction in building its capabilities in cured-in-place pipe (CIPP) lining technology and trenchless pipe rehabilitation along with growing in the attractive water and wastewater sector. The transaction will be accretive to Granite Construction’s earnings per share in 2018.

LiquiForce provides underground contracting services including lateral liner rehabilitation, mainline CIPP, project management, manhole rehabilitation, and mainline point repairs. It generates around $40-million annual revenues with low-double digit EBITDA margins. The all-cash deal will be funded by the company revolving credit facility for financing.

The acquisition is in sync with Granite Construction’s announcement in February to acquire Layne Christensen in a stock-for-stock transaction valued at $565 million. Layne Christensen is a leading water management, construction and drilling company and is currently at the topmost position in well drilling and a second position in CIPP rehabilitation. This buyout will significantly enhance Granite Construction’s presence in the large and growing water infrastructure market, positioning it as a national leader across both the transportation and water infrastructure markets.

Combined with Granite Construction’s existing Kenny Underground business, the LiquiForce addition provides a highly complementary set of trenchless rehabilitation solutions and expertise to its existing portfolio. This will enable it to better serve clients.

The company estimates one-time costs related to the acquisition to be less than $1 million, which will be recorded in the second quarter of 2018.