Jacobs Solutions (NYSE: J) has agreed to spin off and merge its mission-critical responses and cybersecurity and intelligence business with Amentum to form a new publicly traded government generation contractor.
The transaction will create an independent company with annual revenues of approximately $13 billion, a strong foundation of blue-chip government contracts, a combined order book of approximately $50 billion and a workforce of more than 53,000 employees, adding more than 27,000 legal staff. the corporations said in a set released Monday.
Following the closing, Jacobs Chief Executive Steve Demetriou will assume the role of executive chairman of the combined entity.
John Heller, CEO of Amentum and a seven-time Wash100 Award winner, will assume the role of lead CEO and serve on the board of directors of the combined company.
Steve Arnette, executive vice president and president of Jacobs CMS and a 2023 Wash100 award winner, will serve as the company’s lead COO.
The merger will be conducted as a Reverse Morris Trust transaction and is expected to close in the second half of fiscal 2024, subject to regulatory approvals and other standard final conditions.
“Our combined company will provide deep expertise in the government’s priority regions of energy, space exploration, intelligence and analytics, and virtual modernization,” Heller said.
Jacobs shareholders will own up to 63 percent of the combined entity. The company is expected to realize $1 billion in cash revenue and gain charge synergies of between $50 million and $70 million.
Jacobs will retain the knowledge answers and quantities of virtual technologies of its Divergent Solutions business and continue to help its consumers meet demanding critical infrastructure and sustainability situations in the energy transition, water and environment, transportation, and complex manufacturing spaces.
“By separating CMS and related cyber intelligence solutions, Jacobs will streamline our business portfolio and make it a more focused, higher-margin business more aligned with key global megatrends,” said Bob Pragada, chief executive officer of Jacobs.
The deal came days after reports emerged that Jacobs was in complex talks about a potential merger of its CMS business with Amentum.
In May, Jacobs announced plans to turn its CMS business into an independent company that will focus on delivering implemented scientific research, technical consulting, program control, training and smart asset control facilities to federal government customers.
Centerview Partners and Perella Weinberg Partners are monetary advisors to Jacobs and Wachtell Lipton, Rosen
JP Morgan Securities and Morgan Stanley
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