Great Lakes Dredge & Dock Corporation, the largest provider of dredging services in the United States and a major provider of environmental and remediation services, has acquired the stock of Magnus Pacific Corporation (Magnus).
Magnus is expected to generate approximately $118 million of revenue in 2014 and adds approximately $90 million to Great Lakes’ backlog, excluding project option opportunities. This transaction will be accretive to Great Lakes in 2015.
Headquartered outside of Sacramento and with regional offices in Dallas, Denver and Seattle, Magnus is a leading provider of geotechnical and environmental solutions in the Western United States. Magnus has a wide range of competencies, including levee rehabilitation and repair, slurry wall construction, mine reclamation, ground stabilization and wetlands improvements. On average, Magnus’ management team members have 20 years of experience in the geotechnical and environmental services industry.
Great Lakes CEO Jon Berger said: “The Magnus acquisition represents another milestone in our long-term strategic vision of becoming a preeminent environmental services provider. With the addition of Magnus Pacific to the strong platform we have in place with Terra Contracting, we have expanded our geographic footprint across the United States and broadened our suite of capabilities. We look forward to building on the success that our historic dredging business and Terra have had as we continue to execute on complex projects – on both land and water – to the most demanding clients in the nation.”
Kyle Johnson, Great Lakes COO added: “Over the course of our due diligence, we were pleased with Magnus’ dedication to project execution and commitment to safety, which are key values at Great Lakes. We were also impressed with their operating expertise and professionalism, which will provide a strong foundation for integrating our core competencies. We look forward to working with the Magnus team during the integration and beyond as we grow our presence in the environmental and geotechnical space.”
Magnus Founder Louay Owaidat said: “It was very important to Magnus senior management to find the right fit for our company, and we have found that in Great Lakes. With a shared vision to grow and expand, we look forward to a strong partnership with the Great Lakes and Terra team.”
The transaction includes $25 million in cash at closing, a seller’s note with an approximate value of $14 million and a potential earn-out. The former Magnus shareholders will become employees of Great Lakes, and as material inducements, were granted restricted stock unit awards representing the right to receive up to 1,500,000 shares of Great Lakes’ common stock.
Each award vests on March 31, 2020, subject to the applicable employee’s continuous employment with Great Lakes and satisfaction of certain business milestones.