A merger of two water construction companies was announced this week involving firms from Texas and California.
Granite Construction Incorporated based in California has entered into an agreement with Layne Christensen Company of Houston, Texas. Granite is acquiring all of the outstanding shares of Layne in a stock-for-stock transaction valued at $565 million.
The Boards of Directors of both unanimously approved the deal and it is expected to be finalized inn the second quarter of 2018.
Layne Christensen is heavily involved in the transmission of water and pipeline construction in the Permian Basin in Texas. Under the agreement, Layne shareholders will get a fixed exchange ratio of 0.270 Granite shares for each share of Layne common stock they own. It represents $17 per Layne share or a premium of 33%.
Once the agreement is finalized, Layne shareholders will own nearly 12% of Granite shares and the Granite Board will be expanded to include one additional director from Layne.
The agreement allows Granite to become a major player in the water supply business for oil and gas operators. Layne was already the number one water well drilling company in the U.S. and number two for cured-in-place pipe rehabilitation.
Together, Granite and Layne will have nearly 7,000 employees and serve a diverse and growing customer base.
