The transaction adds deep technical consulting and complementary decommissioning capabilities, and enhances Jacobs' full nuclear life cycle offerings
US-based technical professional services firm Jacobs has signed an agreement to acquire John Wood Group’s nuclear business for an enterprise value of £250m on a debt-free, cash-free basis.
Employing over 2,000 people, Wood Nuclear offers solutions that span the entire life cycle of the nuclear industry. The company offers program management technical and consulting services in areas such as decommissioning, nuclear new build and operational support in the civil nuclear and defense segments.
The transaction is expected to improve Jacobs’ capabilities and margin profile of its existing $1.2bn (£990m) nuclear portfolio.
Jacobs chair and CEO Steve Demetriou said: “This acquisition further strengthens Jacobs’ position in highly profitable and complementary sectors within nuclear and defence, enhancing our recognized program management skills with deep, technical expertise.
“We are excited to welcome these talented employees to the Jacobs’ team. Given the compelling and synergistic fit of our two organizations, we believe this transaction will translate into significant value for Jacobs’ shareholders, diverse opportunities for our employees and new, differentiated nuclear and defence solutions for our clients.”
Jacobs intends to close the transaction by the second quarter of 2020
Expected to be completed by the company’s fiscal 2020 second quarter, the transaction is subject to the satisfaction of customary closing conditions, including regulatory approvals.
If the transaction is not cleared by the UK Competition and Markets Authority, Jacobs would pay a fee of approximately $9m to John Wood Group.
Jacobs said that it is planning to finance the transaction through cash on hand and existing credit facilities.
Jacobs chief financial officer Kevin Berryman said: “This acquisition is expected to deliver returns for our shareholders in excess of our cost of capital. We will continue to execute a focused, disciplined and agile capital allocation strategy that is consistent with our objective of compounding above market returns for our shareholders.”
For the transaction, Rothschild & Co served as a financial advisor, and Paul Hastings served as legal counsel to Jacobs, while Price Waterhouse Coopers served as a financial advisor, and Slaughter and May served as legal counsel to John Wood Group.