Jacobs Engineering Group (NYSE: JEC) has agreed to acquire John Wood Group's nuclear business for approximately $300M in cash in an effort to expand its nuclear lifecycle offerings with the addition of technical consulting services and decommissioning capabilities.
The boards of directors of Jacobs and John Wood Group approved the agreement and the transaction is expected to close in the second quarter of fiscal year 2020, subject to regulatory approvals and other customary closing conditions, Jacobs said Wednesday.
"This acquisition further strengthens Jacobs' position in highly profitable and complementary sectors within nuclear and defense, enhancing our recognized program management skills with deep, technical expertise," said Steve Demetriou, chair and CEO of Jacobs.
Wood Nuclear offers program management consulting and technical services in nuclear new build, operations and decommissioning areas in support of civil defense and nuclear segments. The business has more than 2K employees and is expected to generate $285M in revenue for calendar year 2019.
Jacobs expects the deal to broaden its technical capabilities in defense, clean energy and environmental areas as well as accelerate the growth of its aerospace, technology and nuclear business.
The transaction is expected to be accretive to adjusted earnings per share in the range of $0.10 to $0.12 in the first 12 months of ownership and contribute more than 10 percent of adjusted EBITDA margin, including full run-rate cost synergies of approximately $12M from the combined businesses.
Jacobs plans to use existing credit facilities and cash on hand to fund the transaction. It also agreed to pay John Wood Group a fee of approximately $9M in the event that the deal fails to secure approval from the U.K. Competition and Markets Authority.
Rothschild & Co. and Paul Hastings LLP respectively served as financial and legal advisers to Jacobs in the transaction. PwC advised John Wood Group on the deal’s financial aspect, while Slaughter and May acted as the company’s legal counsel.