Jacobs Engineering Group Inc. and CH2M HILL Companies Ltd. have 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 of approximately $3.27 billion, including approximately $416 million of CH2M net debt.
The combination unites two 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 a team of 20,000 employees, CH2M is a 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 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.
“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. 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, 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 an independent consulting firm to support the integration.
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, which has an approximate 18 per cent voting interest in CH2M, has agreed to vote in favour of the transaction.