Home / NEWS / Jacobs to acquire CH2M creating $15bn global engineering major


Jacobs to acquire CH2M creating $15bn global engineering major

by Martin Menachery on Aug 3, 2017


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 organisations globally. (Image courtesy: Jacobs Engineering Group Inc.)
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 organisations globally. (Image courtesy: Jacobs Engineering Group Inc.)

Jacobs Engineering Group Inc. and CH2M HILL Companies Ltd 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.

The enterprise value of the transaction will be approximately US$3.27 billion, including approximately US$416 million of CH2M net debt.

Transaction equity value of US$2.85 billion will be paid 60 percent in cash and 40 percent in Jacobs’ common stock.

Jacobs expects to finance the transaction through a combination of cash on hand, borrowings under the company’s existing revolving credit facility and US$1.2 billion of new committed 3-year term debt arranged by BNP Paribas and The Bank of Nova Scotia.

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 revenues of US$4.4 billion and a team of 20,000 employees, CH2M is a world-renowned design, engineering and programme 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 programme 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,” said Steve Demetriou, Jacobs’ Chairman and CEO.

“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,” added Demetriou.

“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,” remarked Demetriou.

“We are delighted about the prospects of combining CH2M with Jacobs,” said Jacqueline Hinman, chairman and CEO, CH2M. “Since late 2014, we have been transparent about our plans to pursue an ownership transition, providing sustained access to capital for growth,” added Hinman.

“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,” observed Hinman.

“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,” concluded Hinman.


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