WATSONVILLE, Calif. — August 11, 2025 — Granite Construction is continuing its aggressive expansion strategy, announcing the acquisition of two aggregate suppliers while reporting its largest-ever project backlog and a sharp jump in profits.

The California-based infrastructure and materials company acquired Warren Paving, headquartered in Hattiesburg, Mississippi, and Papich Construction, based in Arroyo Grande, California, for a combined $710 million.

These acquisitions strengthen Granite’s materials supply network in the Southeast and expand its construction presence along California’s Central Coast and Central Valley.

Boosting Southeast Strength with Warren Paving

Warren Paving brings significant logistical advantages to Granite’s operations, including:

• Ownership of a quarry, 11 aggregate yards, and three asphalt plants.
• A fleet of 170 owned and leased barges operating on the Mississippi River system, enabling bulk material transport to multiple markets.

“Warren Paving’s logistics expertise should allow us to supply materials to certain Lehman-Roberts and Dickerson & Bowen asphalt plants and positions us to expand the distribution network as we continue to grow our Southeast platform investment,” said Kyle Larkin, Granite CEO.

The deal complements a string of Southeast acquisitions, including Lehman-Roberts and Memphis Stone & Gravel in late 2023 for $278 million, and Dickerson & Bowen in 2024.

Larkin also pointed to the emerging data center boom in the region, which is attracting private developers thanks to affordable land, reliable power, abundant water, and a skilled workforce.

“We believe private investment will ramp up in the region, whether through data centers or other large commercial developments,” Larkin said.

Expanding California Presence with Papich

In California, Papich Construction strengthens Granite’s reach in areas where its footprint was previously limited.

“It’s complementary to our current footprint,” said Larkin, adding that the Central Coast and Valley offer strong public works and infrastructure growth potential.

Financial Impact & Growth Outlook

Granite expects the acquisitions to add $425 million in annual revenue and contribute $150 million in the remainder of 2025 alone. As a result, the company raised its full-year revenue guidance to between $4.35 billion and $4.55 billion.

By the Numbers – Q2 2025

• Backlog: $6.1 billion — up 9% year-over-year, a company record.
• Revenue: $1.13 billion — up 4% from $1.08 billion in Q2 2024.
• Net Income: $71.7 million — nearly double the $36.9 million in last year’s second quarter.

Larkin credited the performance to a robust bidding environment, strong Infrastructure Investment and Jobs Act (IIJA) funding, and improved operational efficiencies.

“In California and across our footprint, we continue to see a healthy list of project bidding opportunities in both the public and private markets,” Larkin said.

He emphasized that IIJA funds are still ramping up, with peak spending not expected until 2026 or 2027.
“IIJA funding continues to be strong,” Larkin said. “I think that’s pretty universal in all the markets that we’re in. And just as a reminder, the spending to date on the IIJA is still less than 50%. And so we haven’t seen, in our opinion, that peak yet.”

Industry Context & Strategic Position

Granite’s moves signal a strategic push to control more of its materials supply chain while positioning itself to capture high-value work in both public infrastructure and private sector megaprojects like data centers.

The acquisitions also diversify its geographic footprint, reducing risk tied to any one regional market.

Infrastructure analysts note that with U.S. public works funding at multi-decade highs — and large-scale private developments demanding heavy civil work — Granite’s combined construction and materials capabilities give it a competitive advantage for years to come.

Originally reported by Joe Bousquin in Construction Dive.