Jacobs Engineering Group has announced it is to acquire CH2M Hill, in a deal expected to close later this year.
Jacobs Engineering Group has announced it is to acquire CH2M Hill, in a deal expected to close later this year.
The agreement includes a cash and stock transaction of $3.27 billion, with Jacobs acquiring $415 million of CH2M debt. Under the deal, CH2M stockholders would own 15% of the Jacobs shares.
Jacobs focuses on the petroleum and chemicals sector, where it provides consulting, engineering, maintenance and project management services. It also provides construction, nuclear and technical support services to the aerospace and defence sectors. CH2M Hill is involved in the infrastructure and government service sectors, including water, transportation, environmental and nuclear. The deal is expected to more than double Jacobs' revenue from its buildings and infrastructure business.
Jacobs plans to finance the cash portion of the deal with cash on hand, borrowings under its existing revolving credit facility and $1.2bn new debt arranged by BNP Paribas and the Bank of Nova Scotia. The deal would add about 15% to Jacobs' adjusted earnings per share and 25% to its adjusted cash earnings in the first full year, following its closure in December 2017. Jacobs expects to save $150 million in costs by the end of the second year.