Global US infrastructure firm Jacobs Engineering Group and one of its main rivals,
In a written statement, Jacobs said it will acquire all of the outstanding shares of CH2M in a cash and stock transaction, including around $416 million of CH2M debt.
CH2M had global revenue in the past 12 months of around $4.4 billion and about 20,000 employees. Its contracts are in the water, transportation, environmental and nuclear sectors.
“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,” said Steve Demetriou, Jacobs chairman and chief executive.
“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,” said Jacqueline Hinman, chairman and chief executive of CH2M.
Jacobs said that it expects to achieve $150 million of annual cost savings by the end of the second year following the close of the transaction. Savings are expected to come from real estate, optimisation of corporate operations, alignment of organisational structures, procurement and IT systems. Jacobs expects to incur around $225 million in one-time costs to achieve these savings.
Jacobs also expects to serve more clients with more solutions in more geographies around the world.
Jacobs has formed an integration management office to oversee the integration of the two companies, led by senior executives from both companies. Gary Mandel, most recently Jacobs president of petroleum & chemicals, will head up the office jointly with Lisa Glatch, head of growth and sales at CH2M.
The merger has been approved unanimously by the boards of directors of both companies.
The transaction is not subject to a financing condition. Jacobs expects to finance the $2.4 billion cash required for the transaction through a combination of cash on hand, borrowings under the Company’s existing revolving credit facility and $1.2 billion of new committed three-year term debt arranged by BNP Paribas and Bank of Nova Scotia. Jacobs’ post-close liquidity is expected to remain robust at around $900 million, according to the statement.
The transaction is expected to close in Jacobs’ fiscal 2018 first quarter and is subject to the satisfaction of customary closing conditions, including regulatory approvals and approval by CH2M stockholders.
Jacobs and CH2M to merge in a US$3.27 deal
Global US infrastructure firm Jacobs Engineering Group and one of its main rivals, CH2M, are to merge under a US$3.27 billion deal. In a written statement, Jacobs said it will acquire all of the outstanding shares of CH2M in a cash and stock transaction, including around $416 million of CH2M debt. CH2M had global revenue in the past 12 months of around $4.4 billion and about 20,000 employees. Its contracts are in the water, transportation, environmental and nuclear sectors.
