ConDig (05-Jun-18). Texas-based water management and drilling service provider Layne Christensen Co, which is set to be acquired by civil contractor and construction materials producer Granite Construction Inc, returned to profit in the first quarter of this year on asset sales and higher revenue.
Net income at the Woodlands-based company for the quarter ended April 30 was $2.9 million compared with a net loss of $4 million in the same period last year.
It comes as revenue rose to $114.5 million compared with $110.9 million in the first quarter of last year.
Layne also reported that income was boosted by a $4.6 million gain on asset sales, primarily within its water resources division, as well as $1.3 million gain in restructuring expenses related to its pending merger with Granite.
Total project backlog was $163.1 million as of the end of the quarter compared with $178.6 million at the end of January this year and $172.2 million a year earlier.
“Our first quarter results were improved over the prior year period and in line with our expectations. We are taking final steps towards a timely closing of the Granite Construction Incorporated merger transaction,” said Michael J. Caliel, president and chief executive officer of Layne.
“By merging with Granite, Layne’s stockholders are expected to meaningfully share in the upside opportunities of a combined company with greater financial resources to invest in growth initiatives and a more diversified, expanded national platform of businesses that is expected to be positioned as a leader across both the transportation and water infrastructure markets.”
Watsonville, California-based Granite revealed in February plans to snap up Layne in a stock-for-stock $565 million deal.
The construction company said the proposed tie up has been unanimously approved by the board of directors of both companies and is expected to close in the second quarter of this year.
Under the terms of the deal, Layne shareholders will receive 0.270 Granite share for each Layne share owened, equal to a premium of 33% over the volume-weighted average prices for Granite and Layne shares over the past 90 trading days.