Transactions Solidify Shifting Jacobs Position

A merger with KeyW and the completion of the sale of its energy and chemical segment to WorleyParsons align with the service company’s decision to focus on its higher-growth, higher-margin lines of business.

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Jacobs Engineering Group has made some key changes to its portfolio recently, announcing the completion of a major segment in its business operations as well as the acquisition of an intelligence provider.

On 22 April, Jacobs entered into a merger agreement with KeyW, a national security provider for intelligence, cyber, and counterterrorism outfits. The move will add IT and analytics capabilities, particularly in software application development, cloud infrastructure, and analytics that permit the collection, transportation, and analysis of data into actionable intelligence. Jacobs said in a statement that it will look to utilize KeyW’s remote data collection and analysis capabilities in its water management operations, among other things.

“As information technology and operation technology converge, we see significant opportunity to leverage KeyW’s technology across our buildings, infrastructure, and advanced facilities client base,” Jacobs Chairman and CEO Steve Demetriou said.

Jacobs will pay approximately $815 million to acquire KeyW, including an estimated $272 million of debt. Jacobs said the merger should net it $15 million in savings by the end of next year, with most of it coming from the elimination of various real estate holdings and public company costs.

One week later, Jacobs closed the previously announced $3.3-billion sale of its energy, chemicals, and resources segment to WorleyParsons. The deal will expand WorleyParsons’ exposure to the refining and petrochemicals sectors. Jacobs said it expects to receive $2.6 billion in net proceeds from the sale.

The two transactions are part of Jacobs’ decision to focus solely on its two higher-growth, higher-margin lines of business—aerospace, technology, environmental, and nuclear, and buildings, infrastructure, and advanced facilities. The company had been shifting its business alignments throughout much of 2017 and 2018, acquiring CH2M Hill for $3.3 billion and Amec Foster Wheeler from the John Wood Group in a $2.9-billion move.