Jacobs buys CH2M in £2.1bn deal

Global infrastructure firm Jacobs Engineering is to buy CH2M for around £2.1bn in an attempt to grow its infrastructure and government services business.

Jacobs, which described itself as a global leader in the worldwide $300bn transportation sector, called CH2M a leader in key infrastructure and government service sectors that it has previously targeted for growth, including transportation.

It said: ‘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.’

Jacobs chairman and CEO Steve Demetriou said: ‘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.’

CH2M chairman and CEO Jacqueline Hinman said: ‘Since late 2014, we’ve been transparent about our plans to pursue an ownership transition, providing sustained access to capital for growth.

‘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 said the transaction equity value of $2.85bn (around £2.1bn) would be paid 60% in cash and 40% in Jacobs Common Stock. It added that ‘annual cost synergies’ of $150m (£113m) were expected to result from the deal.

Jacobs recently won a Highways England contract worth £15m to develop possible solutions for the 150km Oxford to Cambridge Expressway project.

Earlier this year CH2M was embroiled in controversy over a £170m HS2 contract, from which it withdrew following allegations of a conflict of interest.

It was previously reported to be in merger talks with Atkins, which was recently acquired by Canadian firm SNC-Lavalin – also for £2.1bn.

 
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