Deal of the Year: Jacobs buys CH2M Hill
Jacobs Buys CH2M Hill
Steven J. Demetriou
This acquisition brings extra strengths to Jacobs' portfolio, including services in the water, transportation, environmental and nuclear industries.
When Dallas-based Jacobs Engineering Group announced its agreement to purchase CH2M Hill in August, many perceived it as a move to obtain infrastructure and government-services business. The $3.27 billion deal, which includes CH2M's net debt, is one of the largest ever in engineering. More than that, however, is what it represents.
The deal is part of the larger trend of AEC firms growing by strategically acquiring companies to add regional access and specific skill sets to their repertoires. Englewood, CO-based CH2M, which employs 20,000, is considered a leader in the water, transportation, environmental and nuclear industries. Since its founding in 1946, the company has worked on notable projects including the Panama Canal extension and a 15.5-mile-long tunnel to improve London's sewage system, reports the Wall Street Journal. Jacobs, operating in 25 countries with 54,000 employees, excels in the growing global transportation sector, including work with highways, rail, aviation and ports.
The deal is part of the larger trend of AEC firms growing by strategically acquiring companies to add regional access and specific skill sets to their repertoires.
Set to close in the first fiscal quarter of 2018, the deal is estimated to create a company with a combined revenue of $15.1 billion. Buildings and infrastructure will comprise 32% of that figure, aerospace and technology accounting for 24%, and industrial and petroleum and chemicals representing 22% each.
2016 Revenue: Jacobs vs. CH2M Hill
The recent merger is expected to increase Jacobs' annual revenue and save them $150 million each yearData from Jacobs and Forbes
"This is a significant step for both companies as we unite complementary cultures and capabilities, expand presence around the world and accelerate profitable growth," said Jacobs chairman, president and CEO Steve Demetriou in a message on the deal's website.
If President Donald Trump's $1 trillion infrastructure bill comes through, engineering and construction companies like Jacobs-CH2M could see increased business.
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