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Jacobs to Acquire CH2M

 

P/PM INDUSTRY NEWS

Merger will create giant $15 Billion engineering, construction and project management solutions provider

2 August 2017 – Dallas, Texas and Denver, Colorado, USA – Jacobs Engineering Group 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.

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 billion 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.” (photo of Demetriou and Hinman courtesy of CH2M)

“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.”

Jacobs has formed an Integration Management Office (IMO) to oversee the integration of the two companies. The IMO will be jointly led by senior executives from both companies on a dedicated, full-time basis, including, as announced separately today, Gary Mandel, most recently Jacobs President of Petroleum & Chemicals, who has been appointed Executive Vice President of Integration for Jacobs, and Lisa Glatch, Executive Vice President for Growth and Sales at CH2M.

In addition, Jacobs has hired a leading independent consulting firm to support the integration. Rigorous integration processes and protocols are being established to ensure transparency and accountability for synergy capture. Jacobs’ executive leadership team will be actively involved in integration planning with the Company’s Board of Directors engaged in oversight. At the close of the transaction, Jacobs’ Board will be expanded to include an additional director from CH2M.

In connection with integration planning, Demetriou continued, “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.

Jacobs and CH2M have complementary cultures and shared values that put people at the heart of the business. With this foundation and the clear integration plan we have developed, we expect to successfully bring our companies together. We admire CH2M’s engaging culture and look forward to coming together as we work to realize the full benefits of a united team.”

The transaction, which is expected to close in Jacobs’ fiscal 2018 first quarter, is subject to the satisfaction of customary closing conditions, including regulatory approvals and approval by CH2M stockholders. Apollo Global Management, LLC (NYSE: APO), which has an approximate 18% voting interest in CH2M, has agreed to vote in favor of the transaction.

To read the full press release, click here.

Additional information about the transaction can be found at www.Jacobs.com/CH2M.

About Jacobs

Jacobs is one of the world’s largest and most diverse providers of full-spectrum technical, professional and construction services for industrial, commercial and government organizations globally. The company employs over 54,000 people and operates in more than 25 countries around the world. For more information, visit www.jacobs.com.

About CH2M

More than 20,000 employees strong, CH2M leads the professional services industry delivering sustainable solutions to promote positive societal, environmental and economic outcomes through the delivery of infrastructure. CH2Mers make a positive difference providing consulting, design, engineering, operations and maintenance, and program management services for clients needing world-class solutions in environmental; industrial and advanced facilities; transportation; and water, from iconic infrastructure like the Panama Canal to the 2012 Olympic Games in London.

Ranked among the World’s Most Ethical Companies and top firms in environmental consulting and program management, CH2M is the only firm in the engineering and construction industry to receive several prestigious awards, such as the World Environment Center Gold Medal Award for International Corporate Achievement in Sustainable Development, the Stockholm Industry Water Award for its leadership in potable water reuse, and the Catalyst Award for our success in recruiting, developing and advancing women in the workplace. Connect with CH2M at www.ch2m.com; LinkedIn; Twitter; and Facebook.

Source: Jacobs Engineering