AECOM to pay $4 billion for engineering firm URS Corp
(Reuters) - Engineering design firm AECOM Technology Corp on Sunday said it would pay about $4 billion in cash and stock to acquire URS Corp, an engineering and construction services company, to create a combined company with about $19 billion in annual sales and more than 95,000 employees.
AECOM in a news release said it would pay $56.31 a share in cash and stock for URS, and that including the assumption of URS debt, the total enterprise value of the deal is about $6 billion.
Terms of the deal were unanimously approved by both of the California-based companies, and the deal is expected to close in October, AECOM said.
URS stockholders will receive $33 in cash and 0.734 share of AECOM common stock for each URS share. The price represents a premium of 19 percent over the trailing 30-day average closing price of URS shares and an 8 percent premium over URS' closing share price on Friday of $52.02.
Reuters reported on Friday that URS had held talks with industry rivals and buyout firms about a potential sale. It noted that URS, which has been under pressure from activist investor Jana Partners to enhance shareholder value, had hired bankers to contact potential buyers and gauge their interest in the past few months, according to people familiar with the efforts.
URS provides engineering, construction and technical services to companies and to U.S. federal agencies, which accounted for a third of its 2013 revenue. Its government customers include the U.S. Army and the Department of Energy. Aside from AECOM, other large rivals are Fluor Corp, Jacobs Engineering Group, Tetra Tech Inc and Chicago Bridge & Iron Company.
AECOM said the deal would make it one of the largest companies by revenue in the engineering and construction industry, and that it would become the largest publicly traded company headquartered in Los Angeles. It said it would maintain significant operations in San Francisco, where URS is based.
The transaction will create $250 million in annual cost-saving synergies, nearly all of which will be achieved by the end of fiscal year 2016, AECOM said. And it will be more than 25 percent accretive to AECOM's cash earnings per share in fiscal year 2015, excluding transaction costs, the company said.
(The story was corrected in the headline and first paragraph, to show that the terms of the deal of $4 billion being paid in cash and stock. In second paragraph, adds that the value is $6 billion including assumption of debt)
(Reporting by Ransdell Pierson; Editing by Cynthia Osterman)
WASHINGTON - The number of Americans filing new claims for unemployment benefits rose last week, but the underlying trend pointed to a continuing strengthening of labor market conditions.
BEIJING/HONG KONG - China reiterated its opposition on Thursday to a European Union plan to limit airline carbon dioxide emissions and called for talks to resolve the issue a day after its major airlines refused to pay any carbon costs under the new law.