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GRANITE CONSTRUCTION COMPLETES ACQUISITION OF TARMAC CALIFORNIA

 GRANITE CONSTRUCTION COMPLETES ACQUISITION OF TARMAC CALIFORNIA
 WATSONVILLE, Calif., June 30 /PRNewswire/ -- Granite Construction Inc. (NASDAQ-NMS: GCCO) announced today that the company has completed its acquisition of most of the assets and certain liabilities of Tarmac California Holdings Inc., a Palm Desert, Calif.-based heavy civil construction contractor and construction materials producer for approximately $42.5 million. The acquisition will be financed via part of the proceeds from a new $80 million syndicated loan the company has arranged through a group of lenders led by the Bank of America. Minus the acquisition, the company has a $27 million line of credit available for general corporate purposes or additional acquisitions.
 Granite's new Palm Springs Branch will operate Riverside, Imperial and San Bernardino counties in Southern California. The acquisition is complementary to the geographic marketplace of Granite's branch division, fits the company's vertical integration strategy and gives the company a stronger presence in Southern California. The newly acquired operation, however, is not expected to meet Granite's profitability objectives this year, given the current depressed market conditions in the state and the company's policy to depreciate construction equipment using accelerated methods. Commenting on the company's investment strategy, Granite President and Chief Executive Officer David H. Watts said "the acquisition, while dilutive in the short-term, will give Granite long-term strategic advantages in a market that is expected to offer ample opportunities in the future."
 Watts reported that the Palm Springs area and most of Granite's other markets continue to be impacted negatively by the recession and the dearth of private residential development. "This recession has been severe and persistent, particularly here in California." He added that while the volume of work the company is bidding this year is up over last year, "our hit rate is lower, given the heightened level of competition we're seeing in the markets of both of our divisions."
 The company, however, believes that it is very well positioned financially and geographically to meet the challenges of the marketplace. Granite continues to look for additional opportunities in the current business climate that would enable the company to provide long-term prospects to grow its business, either through strategic acquisitions or investments in property and equipment.
 Granite is a heavy civil contractor engaged in the construction of highways, dams, airports, mass transit facilities and other infrastructure-related projects. The company also manufactures asphalt, concrete base rock and other construction materials. The company's stock trades on the NASDAQ National Market System under the symbol GCCO.
 -0- 6/30/92
 /CONTACT: Michael Lawson of Granite Construction, 408-761-4717/
 (GCCO) CO: Granite Construction Inc.; Tarmac California Holdings Inc. ST: California IN: CST SU: ACC


MC-MM -- SJ001 -- 5022 06/30/92 09:01 EDT
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Publication:PR Newswire
Date:Jun 30, 1992
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