Jacobs will spin off its Critical Mission Solutions and Cyber & Intelligence government services businesses and merge them with Amentum, creating a new publicly traded company on the GovCon Market.
Jacobs' decision to separate its CMS business was first revealed in May, with the aim of creating two separate companies. The merger with Amentum is expected to be completed in the second half of 2024.
Upon completion of the transaction, Jacobs Executive Chairman Steve Demetriou will assume the role of Executive Chairman of the combined company. John Heller, Amentum's current CEO, will become CEO of the combined entity and will join its board of directors. Additionally, Steve Arnett, currently Executive Vice President and President of CMS, will be appointed Chief Operating Officer.
“Combining our great organizations ⏤ Amentum, CMS, and Cyber & Intelligence Solutions ⏤ creates a leading provider of systems integration and technology solutions with the talent, scope, scale, and footprint to provide our clients with superior solutions and a broader range of solutions.” Heller said.
“Our combined company will provide extensive expertise in the government's top priority areas of energy, space exploration, intelligence and analytics, and digital modernization. We are excited about the unity of our strong team and our bright future. looking forward to it.”
The merger will create a government technology solutions business. $13 billion Annual revenue is comprised of Jacobs' Critical Mission Solutions, the Cyber & Intelligence portion of its Divergent Solutions business, and Amentum.
“By separating CMS and related Cyber & Intelligence solutions, Jacobs streamlines our business portfolio and transforms us into a more focused and profitable company more closely aligned with key global megatrends. “We do,” the Jacobs CEO said. bob pragada.
Generated by Jacobs Cyber & Intelligence Solutions $807 million Revenue is expected in fiscal 2023.
“We believe this transaction is in the best interest of the Company and our stakeholders, and in addition to the benefits of a tax-efficient transaction, we will gain further value from significant cash proceeds and the realization of future synergies. can do.” Pragada said. “I am confident that our CMS and Cyber & Intelligence Solutions teams are poised for continued success in our new chapter as part of a more focused, independent public company. The public company will be a leading player in the government services space with both breadth and depth of critical missions. Enhance your capabilities across a more diversified portfolio. ”
Under the terms of the transaction, the board of directors of the new company created by the merger will initially consist of an equal number of directors appointed by both Jacobs and Amentum. Additionally, the combined company's senior management team will include members from both companies. Specific individuals filling these roles will be announced at a later date.
“Over the past eight years, we have focused on driving cultural and business transformation to position Jacobs as a technology-enabled solutions provider and one of the most innovative companies in the world,” said Demetriou. says. “I look forward to working with John, Steve and the Board of Directors to bring the same dedication to the successful launch of this new public company and delivering significant value-add opportunities for our customers, shareholders and employees. I look forward to helping.”
The combined company expects to have more than 80% of its revenue from prime contracts servicing the full lifecycle of programs for government customers and a talent base of more than 53,000 employees. The companies share common values and focus on safety, inclusion and diversity, according to a press release.
“If you look at our past successes as Amentum, it's been a track record of adding capabilities that have allowed us to compete in large-scale enterprise opportunities that we wouldn't have been able to achieve as an individual company.” Heller said in a Nov. 21 article. Press call regarding this transaction. “This integrated capability allows us to add our portfolio to the pipeline of multi-billion dollar enterprise contracts. Competing for these opportunities requires expanded integration and cyber capabilities. is.”
Over the past year, Amentum has doubled its bidding capacity and nearly doubled the number of contracts awarded in fiscal year 2023. According to Heller, this growth is directly due to the company's increased ability to handle large enterprise-type contracts.
“We believe this opportunity for Jacobs and Amentum to work together will allow us to significantly expand our engineering, cyber, and science capabilities and compete in RTD&E, science, design, and engineering-related markets that we could not compete in separately. ,” Heller said.
In fact, the combined company will be approximately 50 billion dollars Total backlog is expected to be even higher $1.1 billion Adjusted EBITDA in 2024.
The transaction is structured as a reverse Morris Trust transaction and will be tax-free to Jacobs' stockholders under U.S. federal tax law. Upon completion of the transaction, Jacobs and its shareholders will own between 58.5% and 63% of the common stock of the new company. This includes 51% of the shares held by Jacobs shareholders and 7.5% to 12% held by Jacobs.
Centerview Partners LLC and Perella Weinberg Partners LP are serving as financial advisors to Jacobs, and Wachtell Lipton, Rosen & Katz is serving as legal advisor. Goldman Sachs & Co. LLC is advising Jacobs' board of directors. For Amentum, JP Morgan Securities LLC and Morgan Stanley & Co. LLC are acting as financial advisors and Cravath, Swaine & Moore LLP is acting as legal advisor.
