GRANITE CONSTRUCTION INC 8-K

What Happened

• Granite Construction Incorporated announced on February 18, 2026 that it entered into privately negotiated Exchange Agreements to repurchase $100 million aggregate principal amount of its 3.75% Convertible Senior Notes due 2028 (the “Exchanged Notes”). The exchanges are subject to customary closing conditions and the Exchanged Notes will be canceled promptly at closing.
• Consideration will be paid in cash or a mix of cash and common stock depending on the per‑share volume‑weighted average price (VWAP) of the company’s common stock during a 15 trading‑day Measurement Period beginning February 18, 2026. If the VWAP is not greater than $140.00, the consideration will be paid entirely in cash. Using the February 17, 2026 closing price of $128.61 as an illustration, the total purchase price would be about $283 million (including accrued interest) and paid fully in cash.
• In connection with the exchanges, Granite entered partial Unwind Agreements with certain capped‑call counterparties to unwind call option positions tied to the Exchanged Notes. The counterparties will pay Granite an amount determined by VWAP during an averaging period starting February 18, 2026. HudsonWest LLC served as financial advisor.

Key Details

• Exchange Date: February 18, 2026; Measurement Period: 15 trading days beginning Feb 18, 2026.
• Aggregate principal exchanged: $100.0 million of 3.75% Convertible Senior Notes due 2028.
• Illustrative total cash cost (using $128.61 VWAP): ~ $283 million, inclusive of accrued interest.
• Post‑closing expected convertible notes outstanding: $273.75 million; expected reduction in diluted share count: ~2.2 million shares (may be partially offset if shares are issued as part of consideration).

Why It Matters

• This transaction reduces the company’s convertible debt by $100 million (if completed) and removes conversion claims that currently contribute to diluted share count, which can be positive for existing shareholders’ dilution metrics.
• The actual cash cost and any stock issuance depend on the VWAP during the Measurement Period; if VWAP stays below $140, Granite will pay in cash, increasing near‑term cash outflow. The unwind agreements may provide cash from counterparties to offset part of the cost.
• Investors should note the exchanges are subject to closing conditions and the precise impact on leverage, liquidity and share count will depend on final VWAP and any shares issued as consideration.