Jacobs (NYSE: J) will spin off its critical mission solutions business into an independent company focused on providing applied science research, technical consulting, program management, training and intelligent asset management support services for federal government customers.
Steve Arnette, executive vice president and president of CMS business at Jacobs and a 2023 Wash100 awardee, will continue to oversee CMS after the spinoff and Jacobs said Wednesday it expects the separation to conclude in the second half of fiscal year 2024, subject to approval by the board of directors, receipt of a private letter ruling from the Internal Revenue Service and other customary closing conditions.
CMS has a portfolio of recurring enterprise contracts and delivers mission-critical tech platforms aligned to national security, space, 5G and nuclear remediation areas. The business, which will be spun off to Jacobs’ shareholders through a tax-free transaction, recorded approximately $4.4 billion in FY 2022 revenue.
Jacobs CEO Bob Pragada said the move seeks to drive value creation for shareholders.
“By separating CMS, we will streamline our business portfolio and transform Jacobs into a higher-growth, higher-margin company more closely aligned with key global mega trends and growth sectors,” noted Pragada.
After the deal’s completion, Jacobs will continue to provide capabilities in the areas of planning, consulting, engineering, design, program management and data science to deliver end-to-end tech platforms to national, state and local governments and private sector customers worldwide.
Centerview Partners and Perella Weinberg Partners act as financial advisers to Jacobs in the transaction, while Wachtell, Lipton, Rosen & Katz serves as legal adviser.