Rock Products

JAN 2013

Rock Products is the aggregates industry's leading source for market analysis and technology solutions, delivering critical content focusing on aggregates-processing equipment; operational efficiencies; management best practices; comprehensive market

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IN THE KNOW Mellott Hires Whitmyer Mellott Co. hired Dan Whitmyer as sales manager – Eastern Pa. and N.J. Whitmyer comes to Mellott Co. with more than 10 years of aggregate equipment and sales experience. PRODUCER NEWS FAST FACT According to the company, his level of expertise is highly recognized throughout the region and industry. He brings with him the ability to im‐ mediately contribute to the perform‐ ance of the Mellott team. "We look forward to his contributions as he continues to develop his career with Mellott Co.," the company said in a release. New hire has more than 10 years of aggregates equipment and sales experience. Mellott Co. provides: n Crushing: Mellott Co. is pleased to provide customers in the east‐ ern United States with large and small volume mobile crushing services. n Engineering: With expertise in stationary plants, portable plants and conveyors, Mellott Co. is the international leader in plant de‐ sign/engineering, applications and fabrication. n Equipment: Mellott Co. understands the importance of equipment availability to facili‐ tate an operation's crushing, screening and conveying require‐ ments. They offer a complete product line of stationary, mobile and track equipment for domes‐ tic and international customers. n Parts and Service: The company also understands the importance of equipment relia‐ bility, since any operational downtime is both inconvenient and costly. At Mellott Co., part of providing unbeatable service is its multi‐million dollar inven‐ tory of crusher parts, screening parts and conveyor components to keep its customers up and running. Granite to Acquire Kenny Construction Founded in 1927, Kenny is a privately owned, North‐ brook, Ill.‐based company with about 425 employees. Kenny offers a comprehensive range of services related to power transmission and distribution, construction man‐ agement, tunnels, trenchless and underground utilities and heavy‐civil infrastructure. Kenny's revenues are pro‐ jected to be $270 million for 2012 with approximately 50 percent of revenues associated with the power sector, 20 percent associated with tunneling‐related work and 30 percent coming from water/underground and other heavy/civil related work. As of Dec. 31, 2012, Kenny's backlog was projected to be nearly $390 million. "This acquisition is an important milestone for Granite as we continue to execute on our strategic plan to diversify, strengthen and grow our business," said James H. Roberts, Granite's president and chief executive officer, in a written press statement. "The addition of Kenny's expertise in the power, tunnel and underground markets will significantly expand our presence in these key areas as well as enable 10 ROCKproducts • JANUARY 2013 us to leverage our capabilities and geographic footprint to take advantage of opportunities across the country." Under the terms of the definitive agreement, Granite will pay the purchase price of $130 million in cash at closing in exchange for 100 percent of the outstanding shares of Kenny. The purchase price is subject to adjustment for certain items, including any outstanding Kenny indebted‐ ness. Granite will receive a tax "step up" in the assets of Kenny and its subsidiaries that is expected to provide fu‐ ture tax benefits to Granite. These benefits imply an effec‐ tive purchase price of 5.0x Kenny's projected 2012 EBITDA. FAST FACT Granite Construction Inc. will acquire Kenny Construction Co. for $130 million, Granite announced in a Dec. 28 writ‐ ten statement. Northbrook, Ill.-based company purchased for $130 million. Granite intends to finance the transaction through a com‐ bination of cash and available borrowings under its exist‐ ing revolving credit facility. The transaction closed in escrow, and became effective on December 31, 2012. One‐ time costs related to the acquisition of Kenny are esti‐ mated to be approximately $5 million and will be recorded in the fourth quarter 2012.

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