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Jacobs acquires CH2M in multi-billion dollar deal 17 Aug 2017

TunnelTalk reporting

Jacobs Engineering is to acquire CH2M under a US$3.27 billion cash and stock transaction that includes about $416 million of CH2M net debt.

The transaction equity value of $2.85 billion will be paid for by 60% in cash and 40% in Jacobs common stock. With the merger the Jacobs revenue in building and infrastructure is expected to rise from $2.3 billion to $4.8 billion. Total Jacobs revenue is calculated to rise from $10.7 billion to $15.1 billion. The transaction is expected to close in the Jacobs fiscal 2018 first quarter.

Combined resources of the merged companies
Combined resources of the merged companies

The transaction equity value of $2.85 billion will be paid for by 60% in cash and 40% in Jacobs common stock. With the merger the Jacobs revenue in building and infrastructure is expected to rise from $2.3 billion to $4.8 billion. Total Jacobs revenue is calculated to rise from $10.7 billion to $15.1 billion. The transaction is expected to close in the Jacobs fiscal 2018 first quarter.

With a team of 20,000 employees, engineering firm CH2M operates in key infrastructure and government service sectors that Jacobs Engineering has previously targeted for growth, such as water, transportation, environment and the nuclear industry. “By increasing our industry reach and adding to our skills, this transaction enhances value to our clients. CH2M brings to Jacobs capabilities and values that are complementary to our own,” said Jacobs Chairman and CEO Steve Demetriou. “This transaction propels Jacobs toward our vision of providing innovative solutions for a more connected, sustainable world.”

“We are delighted about the prospects of combining CH2M with Jacobs,” said CH2M Chairman and CEO Jacqueline Hinman. “Since late 2014 we have been transparent about our plans to pursue an ownership transition, providing sustained access to capital for growth. This was the unanimous choice of our Board. Considering all of the options, we focused on securing greater opportunities for our employees, delivering superior value to our clients and enhanced value for our stockholders.”

Merger creates one of the world’s largest engineering firms.
Merger creates one of the world’s largest engineering firms.

Jacobs, with 54,000 employees, expects the merger with CH2M will create a combined company of choice in the transportation sector. The combined company is expected to better attract and retain talent and address the sector’s resource constraints. According to the company, capitalizing on the Jacobs and CH2M combined talent, resources and scale creates an opportunity to better serve clients.

Jacobs has formed a management office to oversee the integration of the two companies and has hired an independent consulting firm to support the integration. “Jacobs and CH2M have complementary cultures and shared values that put people at the heart of the business,” said Demetriou. “With this foundation and the clear integration plan we have developed, we look forward to realizing the full benefits of the united team.”

Further details are presented in the pdf data sheet.

References

           

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