Actionable news
0
All posts from Actionable news
Actionable news in JEC: JACOBS ENGINEERING GROUP,

Jacobs to Acquire CH2M to Create Premier $15 Billion Global Solutions Provider

DALLAS & DENVER--(BUSINESS WIRE)--Jacobs Engineering Group Inc. (NYSE:JEC) and CH2M HILL Companies Ltd. today announced that they have entered into a definitive agreement under which Jacobs will acquire all of the outstanding shares of CH2M in a cash and stock transaction with an enterprise value (EV) of approximately $3.27 billion, including approximately $416 million of CH2M net debt.

“Jacobs is leveraging lessons learned from past experiences and is focused on critical success factors, including retaining talent, building on the strong culture foundations of both companies, ensuring base business performance, and developing and delivering cost and growth synergies. ”

Tweet this

The combination unites two industry-leading, innovative companies with complementary capabilities, cultures and relationships, resulting in a differentiated, end-to-end value proposition for clients and an enhanced platform for sustainable, profitable growth.

With trailing twelve month (TTM) revenues of $4.4 billion1 and a team of 20,000 employees, CH2M is a world-renowned design, engineering and program management firm, and is a leader in key infrastructure and government service sectors that Jacobs has previously targeted for growth, including water, transportation, environmental and nuclear. Applying CH2M’s advanced design, technical and program management expertise across Jacobs’ global footprint will enable the combined company to deliver more solutions to more clients in both the government and private sector.

“By increasing our industry reach and adding to our already extensive skills, this transaction enhances our value to our clients and bolsters Jacobs’ position as a premier consulting, design, engineering, construction, and operations and maintenance technical services firm. CH2M brings to Jacobs a talented, engaged team with capabilities and values that are very complementary to our own. Together, we will bring more solutions to our clients, give more opportunity to our employees and create increased value for Jacobs’ shareholders. In addition, this transaction is consistent with our M&A criteria, accelerating our ability to achieve our financial growth targets and propelling Jacobs toward our vision of providing innovative solutions for a more connected, sustainable world,” said Steve Demetriou, Jacobs’ Chairman and CEO.

“We are delighted about the prospects of combining CH2M with Jacobs,” said CH2M Chairman and CEO Jacqueline Hinman. “Since late 2014, we’ve been transparent about our plans to pursue an ownership transition, providing sustained access to capital for growth. 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, all while continuing to serve the higher purpose our company is known for, providing sustainable solutions for a better world. Throughout this time, we strengthened our business portfolio and performance, which put us in a position to deliver the best possible value and outcome for the future of the company. This was the unanimous choice of our Board, and the value Jacobs will provide to our stockholders, reflects genuine appreciation for our employees and the world-class work we deliver to our clients.”

Compelling Strategic Benefits: Advancing Jacobs’ Strategy to Grow in High Margin, High Growth Business Lines2

  • Provides Leading Position in Infrastructure, Including Water and Transportation: Water represents an approximate $100 billion opportunity, growing 4% to 5% on a compounded annual rate. Engineering News-Record has identified CH2M as the top water design firm in the world. By leveraging CH2M’s world-renowned technical expertise in water across Jacobs’ global operating platform and strong project delivery skills, the combined company will have a premier global water business with the scale, critical mass and experience needed to more fully capitalize on industry growth trends.

Jacobs is already a global leader in the resource-constrained $300 billion transportation sector, which includes highways, rail, aviation and ports, and is growing 4% to 5% on a compounded annual rate. This sector has large spend and significant momentum given population growth and associated need for all transportation modes in multiple geographies, particularly in the United States, Australia, New Zealand, Southeast Asia, the Middle East and the United Kingdom. Jacobs’ premier position in transportation with CH2M is expected to make the combined company an employer of choice, enabling it to better attract and retain talent and address the sector’s resource constraints. Capitalizing on Jacobs’ and CH2M’s combined talent, resources and scale creates a unique opportunity to better serve clients and improve the quality and dependability of their infrastructure.

  • Better Positions Jacobs to Achieve Significant Growth in the Government Services Sector by Establishing Jacobs as a Tier 1 Service Provider to the Global Nuclear Industry and Significantly Expanding its Environmental Capabilities: Nuclear represents an approximate $145 billion opportunity, growing 2% to 3% on a compounded annual basis, with nuclear-related projects requiring specialized capabilities that are difficult to replicate. CH2M’s preeminent brand for program and project delivery in large scale environmental remediation in the nuclear industry, coupled with Jacobs’ complementary experience with governmental agencies around the world, including nuclear decommissioning, create significant business expansion opportunities.

Environmental work represents an approximate $160 billion opportunity, growing 4% to 5% on a compounded annual rate. The combined company will have among the broadest and deepest environmental capabilities in the industry. In addition, CH2M’s environmental expertise builds on Jacobs’ existing U.S. Federal client base, positioning the combined company to be a stronger partner for global government clients. Further, this leading environmental capability, from planning and permitting to remediation, is transferable across Jacobs’ private sector client base, creating the opportunity for substantial upside potential for the combined company.

  • Strengthens Capabilities in Industrials, and Petroleum and Chemicals: In Industrials, the transaction combines both companies’ superior engineering skills and proven construction management of high tech facilities to result in world-class, clean manufacturing expertise. This differentiated, end-to-end offering will better position Jacobs to respond to cyclical customer requirements in this sector.

The transaction also enhances Jacobs’ existing position in the petroleum and chemicals industry by providing...


More