(In headline and first paragraph, corrects terms of deal to
show that $4 billion being paid in cash and stock. In second
paragraph, adds that the value is $6 billion including
assumption of debt)
July 13 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
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
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
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.
(Reporting by Ransdell Pierson; Editing by Cynthia Osterman)