v3.26.1
Acquisitions
 6 Months Ended
Jun. 30, 2026
Business Combination [Abstract]  
Acquisitions Acquisitions
We accounted for our recent acquisitions in accordance with Accounting Standards Codification (“ASC”) Topic 805, Business Combinations. The preliminary purchase prices were allocated to assets acquired and liabilities assumed based on their estimated fair values as of the respective acquisition dates. The purchase price allocations for KSC Utah Investments, Inc. (“Kenny Seng Construction”), Cinderlite Trucking Corporation (“Cinderlite”), Slats Lucas, LLC and Warren Paving, Inc. (collectively, “Warren Paving”), and Papich Construction Company, Inc. (“Papich Construction”) are preliminary and have not been finalized due to the recent timing of these acquisitions, 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 businesses, 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 purchase price accounting in the 12 months following each acquisition.
Kenny Seng Construction
On April 23, 2026, we completed the acquisition of Kenny Seng Construction, for $164.1 million in cash, subject to customary closing adjustments. We purchased all of the issued and outstanding common stock of Kenny Seng Construction, which is a provider of construction services and materials in Utah. This acquisition aligns with our strategy of enhancing our vertical integration by strengthening an existing home market. Kenny Seng Construction's customers are in both the public and private sectors.
Kenny Seng Construction's results have been included in the Construction and Materials segments since the acquisition date. Revenue attributable to Kenny Seng Construction for the three and six months ended June 30, 2026 was $29.8 million. Gross profit attributable to Kenny Seng Construction for the three and six months ended June 30, 2026 was $3.5 million.
Preliminary Purchase Price Allocation
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 $163.6 million. Based on our preliminary purchase price allocation, the net tangible and identifiable intangible assets acquired were $70.4 million and $45.3 million, respectively. We recorded goodwill of $47.9 million, all of which is expected to be tax deductible. The acquired goodwill is primarily attributable to the Construction segment, with an immaterial amount recorded in the Materials segment. The most significant assets acquired were property and equipment of $68.2 million and accounts receivable of $12.6 million. The identifiable intangible assets acquired consisted of backlog, trademarks/trade name, water rights, and customer relationships.
Pro Forma Financial Information
The pro forma financial information in the table below summarizes the combined results of operations of Granite and Kenny Seng Construction as though the companies had been combined as of January 1, 2025. 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, 2025, nor does it intend to be a projection of future results.
Three Months Ended June 30,Six Months Ended June 30,
(unaudited, in thousands)2026202520262025
Revenue$1,471,714 $1,167,402 $2,410,248 $1,891,798 
Net income attributable to Granite Construction Incorporated$(289,847)$74,336 $(328,023)$36,921 
These amounts have been calculated after applying Granite’s accounting policies and adjusting the results of Kenny Seng 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, 2025. Acquisition-related expenses related to Kenny Seng Construction that were incurred during the three and six months ended June 30, 2026 are reflected in the six months ended June 30, 2025 due to the assumed timing of the transaction. The statutory tax rate of 26% was used for both 2026 and 2025 for the pro forma adjustments.
During the three and six months ended June 30, 2026, we incurred $1.9 million and $3.8 million, respectively, of acquisition-related costs associated with the Kenny Seng Construction acquisition which were primarily related to professional services and are included in Other costs, net on the Condensed Consolidated Statement of Operations.
Cinderlite Trucking Corporation
On October 3, 2025, we completed the acquisition of Cinderlite and related assets, for $58.5 million in cash, subject to customary closing adjustments. We purchased all of the outstanding equity interest of Cinderlite, which is a construction materials, landscape supply, and transportation company in Carson City, Nevada. This acquisition aligns with our strategy of enhancing our vertical integration by strengthening an existing home market. Based on the preliminary purchase price allocation, the net tangible assets acquired were $58.3 million. The most significant asset was property and equipment of
$58.1 million. We recorded $0.1 million in goodwill that was allocated to our Materials segment and is deductible for income tax purposes. Cinderlite's customers are in both the public and private sectors.
Cinderlite's results have been included in the Materials segment since the acquisition date. Revenue attributable to Cinderlite for the three and six months ended June 30, 2026 was $7.6 million and $11.0 million, respectively. Gross profit attributable to Cinderlite for the three and six months ended June 30, 2026 was immaterial.
Warren Paving
On August 5, 2025, we completed the acquisition of 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.
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 six months ended June 30, 2026 was $72.5 million and $133.7 million, respectively. Gross profit attributable to Warren Paving for the three and six months ended June 30, 2026 was $7.1 million and $16.7 million, respectively.
Preliminary Purchase Price Allocation
The following table presents the preliminary purchase price allocation:
(in thousands)
Assets:
Cash and cash equivalents$4,217 
Receivables38,564 
Contract assets609 
Inventories28,425 
Other current assets112 
Property and equipment419,737 
Right of use assets54,867 
Other noncurrent assets5,767 
Total tangible assets552,298 
Identifiable intangible assets46,800 
Liabilities:
Accounts payable21,059 
Contract liabilities2,217 
Accrued expenses and other current liabilities13,360 
Long-term lease liabilities46,630 
Deferred income taxes, net103,017 
Other long-term liabilities7,000 
Total liabilities assumed193,283 
Total tangible and identifiable net assets acquired405,815 
Goodwill142,768 
Preliminary purchase price (1)$548,583 
(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 $142.8 million of goodwill, none of which is deductible for federal or state income tax purposes. Of the acquired goodwill, $29.2 million was allocated to the Construction segment and $113.6 million was allocated to the Materials segment.
Papich Construction
On August 5, 2025, we completed the acquisition of 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 six months ended June 30, 2026 was $48.5 million and $77.3 million, respectively. Gross loss attributable to Papich Construction for the three and six months ended June 30, 2026 was $1.5 million and $7.5 million, respectively.
Preliminary Purchase Price Allocation
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 $178.0 million. Based on our preliminary purchase price allocation, the net tangible and identifiable intangible assets acquired were $121.8 million and $16.1 million, respectively, resulting in acquired goodwill of $40.1 million, all of which is expected to be deductible for federal and state income tax purposes. The identifiable intangible assets acquired consisted of backlog, permits and customer relationships. Of the acquired goodwill, $5.0 million is in the Materials segment and $35.1 million is in the Construction segment. The most significant assets acquired were $88.2 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.