Jacobs Engineering Group Inc. has announced that it has entered into a definitive agreement to sell its Energy, Chemicals and Resources (ECR) segment to WorleyParsons Limited for US$3.3 billion, consisting of US$2.6 billion in cash and US$700 million in WorleyParsons ordinary shares.
The transaction value represents a multiple of more than 11.5 times trailing twelve-month adjusted EBITDA for the ECR business1.
Following the completion of the transaction, Jacobs will be focused solely on its two higher growth, higher margin lines of business – Aerospace, Technology, Environmental & Nuclear (ATEN) and Buildings, Infrastructure & Advanced Facilities (BIAF).
"For Jacobs, this transaction marks an inflection point in our portfolio transformation focused on more consistent, higher-margin growth as a leader solving the world's critical challenges," said Jacobs Chairman and CEO Steve Demetriou. "The increased financial flexibility we gain from this sale better positions us to invest in our ATEN and BIAF businesses, focusing our premier talent and expertise on technology, innovation, and sustainable solutions that are priorities for our infrastructure and government services clients. These capabilities, along with our strong backlog and efficient global platform, will further strengthen our global leadership in these segments to drive meaningful value creation."
The company will report results for fiscal 2018 on Nov. 20.
"While we are in the process of finalising our fiscal 2018 results, our current view is materially consistent with previously announced guidance for the year," said Jacobs CFO Kevin Berryman. "In addition, we continue to believe that the adjusted EPS guidance provided for fiscal 2019 remains appropriate, keeping in mind that such guidance did not reflect any impact from the pending transaction announced today."
"Upon the closing of this transaction, we plan to initially apply proceeds to pay down floating-rate debt," Berryman added. "Beyond that, our strong financial flexibility and free cash flow will support incremental profitable growth investments and capital returns to shareholders, consistent with our record of disciplined allocation, yielding attractive growth and value creation."
Read the article online at: https://www.worldfertilizer.com/special-reports/29102018/jacobs-sells-energy-chemicals-and-resources-business-to-worleyparsons-for-us33-billion/
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