Great Lakes Dredge & Dock Corporation (NASDAQ:GLDD), the largest provider of dredging services in the U.S has acquired the assets of L.W. Matteson, Inc., a maintenance dredging, environmental dredging and levee construction company located in Burlington, Iowa, for $45 million. The acquisition will be funded with $37.5 million in cash and a seller note of $7.5 million.
L.W. Matteson, Inc. has one of the largest fleets of specialized portable dredging and earthmoving equipment on the inland river system. With expertise in dredging, marine construction, environmental and habitat restoration, Matteson is described by Great Lakes Dredge as "a highly respected contractor serving the upper Midwest, and the Mississippi river system." Great Lakes believes by combining the skills, equipment and resources of the companies, new project opportunities and growth can be achieved.
In addition to the United States Army Corps of Engineers, L.W. Matteson serves many state and local governments and private concerns. Services provided include river and lake maintenance dredging, inland levee construction and repair, and environmental and habitat restoration.
Matteson is expected to generate over $40 million of revenue with approximate EBITDA margins between 32 and 36 percent for calendar year 2010. In 2011, the Matteson acquisition is expected to add between $35 million and $40 million to Great Lakes' revenue with EBITDA margins in the mid-to-high 20 percent range. The Matteson transaction will add approximately $25 million to Great Lakes' year-end 2010 backlog.
Jon Berger, CEO, stated "We are very excited about the Matteson acquisition. It fits well into our strategy of growing the company through opportunities that are complementary to our skill sets. We believe this acquisition provides us the expertise and assets to perform on projects in the rivers, environmental lake dredging and levee repair markets. We expect to see continued strong and growing demand for each of these segments. River dredging is an area that we have had experience in since the early 1990s, and we look forward to expanding our reach."
Bruce Biemeck, President and CFO, commented "We believe this acquisition is a logical extension of our dredging market leadership, by increasing our geographic reach while expanding our dredging related services to include environmental dredging and levee construction and repair. We are looking forward to taking a leadership position in these new markets, where we see significant growth in the near future.
"We are impressed with the Matteson's business, which was founded by Lawrence W. Matteson and operated by Mr. Matteson and his son Larry. Their operating methods and innovation have been the basis for building a company that is respected in each market it serves. We are pleased to be associated with the Mattesons and look forward to working with the team to build on the Mattesons' established legacy of outstanding performance and customer satisfaction."
January 3, 2011