Today, Jacobs (NYSE:J) announced that it has entered into a definitive agreement to spin off and combine its Critical Mission Solutions and Cyber & Intelligence government services businesses with Amentum, a leading global engineering and technology solutions provider, in an effort to create a new, publicly traded player in the government services industry.. A first announcement was made by Jacobs in May that it intended to split its CMS business into two separate companies that would be more successful in their respective fields. It is with great pleasure that we announce today's transaction as the result of a comprehensive evaluation of all alternatives, including inbound inquiries that resulted from that initial announcement.
It is with great pleasure that we announce today's transaction as the result of a comprehensive evaluation of all alternatives, including inbound inquiries that resulted from that initial announcement.
In addition to Jacobs' Critical Mission Solutions business, the Cyber & Intelligence segments of Amentum's Divergent Solutions (DVS) business, and Jacobs' Critical Mission Solutions, the combination creates a robust, leading government technology solutions business with revenues of around $13 billion1 each year.. As a result of Jacobs' Cyber & Intelligence Solutions, which share significant strategic and operational synergies with CMS, a total of $807 million in revenue was generated by Jacobs' Cyber & Intelligence Solutions in fiscal year 2023 (approximately 85% of DVS's revenues).. There will be no change in Jacobs' innovative, next-generation data solutions and digital technologies business, which is a part of its DVS segment, which is at the core of its ability to provide clients with digitally enabled critical infrastructures solutions
There will be no change in Jacobs' innovative, next-generation data solutions and digital technologies business, which is a part of its DVS segment, which is at the core of its ability to provide clients with digitally enabled critical infrastructures solutions
By separating CMS from its associated Cyber & Intelligence Solutions, Jacobs will be able to streamline its business portfolio and transform into a more focused, higher-margin company that is more closely aligned with key global mega trends," said Bob Pragada, Jacobs CEO.. As a result of this transaction, we believe that the company and its stakeholders will gain the benefits of a tax efficient transaction, plus even more value from significant cash proceeds and future synergies resulting from the transaction.". I am confident that the CMS and Cyber & Intelligence Solutions teams will continue to succeed in their new chapter as members of a more focused, independent public company that is dedicated to being a leading player in the critical mission government services space – offering both breadth and depth of capabilities across a more diversified portfolio of products and services.
I am confident that the CMS and Cyber & Intelligence Solutions teams will continue to succeed in their new chapter as members of a more focused, independent public company that is dedicated to being a leading player in the critical mission government services space – offering both breadth and depth of capabilities across a more diversified portfolio of products and services.
By uniting our three outstanding organizations - Amentum, CMS, and Cyber & Intelligence Solutions - we are creating a leading provider of systems integration and technology solutions with the talent, scope, scale, and footprint to provide excellence and a wider range of solutions to our clients," emphasized Amentum CEO John Heller.. It is our intention that our combined company will be able to deliver extensive expertise in the areas of energy, space exploration, intelligence and analytics, and digital modernization, which are government priorities.". It is with great enthusiasm that we look forward to the union of our strong teams and to a bright future ahead
It is with great enthusiasm that we look forward to the union of our strong teams and to a bright future ahead
Leader with a strong focus on critical infrastructure and sustainability
As part of Jacobs' journey towards becoming a more focused and higher value company, the transaction marks an important milestone in that direction. After separation, Jacobs will continue to be one of the leading technology-enabled solutions providers addressing the world's most complex infrastructure challenges and sustainability challenges through the provision of innovative technology-enabled solutions. Jacobs holds leading positions in the attractive water and environment, energy transition, transportation and advanced manufacturing sectors.. As a result of the separation of the businesses, Jacobs generated approximately $10 billion in revenues.In fiscal year 2023, the company is expected to generate $9 billion in revenue
In fiscal year 2023, the company is expected to generate $9 billion in revenue
The governance and management of the organization
Once the deal is completed, Jacobs Executive Chair Steve Demetriou will become the new Executive Chair of the combined company. John Heller, the current CEO of Amentum, will serve as CEO of the combined company, sitting on the combined company's board, and Dr. Steve Arnette, the executive vice president and president of CMS, will serve as the Chief Operating Officer of the combined company.
Throughout the past eight years, our goal has been to transform Jacobs into one of the world's leading technology-enabled solutions providers and one of the world's most innovative companies by driving a cultural and business transformation. Having the opportunity to work with John, Steve and the board of directors will help me bring the same dedicated focus to a successful launch of this new public company and to deliver significant value to clients, shareholders and employees in the process.
It is expected that Jacobs and Amentum will each appoint an equal number of directors to serve on the board of directors of the combined company at this time. As integration planning progresses, the members of the executive management team of the combined company will be announced at a later date. These members will come from both companies.
An overview of the strategic rationale for the combination2
Details of the transaction
As a result of the structure of this transaction, Jacobs' shareholders will be tax free for U.S. federal tax purposes because it is a reverse Morris Trust transaction, in line with the previously announced plan to separate CMS by means of a spin-off, which is tax-free for Jacobs' shareholders. Among the key details of the transaction are:
Earnings Results for Fiscal Q1 2024 and New Productivity Targets
There will be a conference call/webcast scheduled for Jacobs to discuss this transaction tomorrow, Nov. 21, at 9:00 a.m. ET, followed by a conference call for financial results for the fiscal fourth quarter and full year 2023 at 10:00 a.m. ET. The conference calls can be listened to and the accompanying slides can be viewed on the investor page of Jacobs at www.jacobs.com, while the webcast is available at https://invest.jacobs.com.
In conjunction with Jacobs' strategic portfolio streamlining, the company is announcing a new cost optimization plan, which includes a plan to eliminate stranded costs within the next 24 months, which is part of Jacobs' strategic portfolio streamlining initiatives. In tomorrow's quarterly earnings conference call, further details will be provided regarding Jacobs' cost optimization plan as well as expectations for the enhanced profitability profile of Jacobs following separation. 
The advisors
As a financial advisor to Jacobs, Centerview Partners LLC and Perella Weinberg Partners LP are advising Jacobs, and Wachtell Lipton, Rosen & Katz is advising Jacobs legally. Jacobs Board of Directors is advised financially by Goldman Sachs & Co. LLC. As a financial advisor to Amentum, Morgan Stanley & Co. LLC and J.P. Morgan Securities LLC are providing the firm with financial advisory services. Cravath, Swaine & Moore LLP is providing legal advice to Amentum.
Jacobs: A brief overview
Providing innovative solutions to the world's most challenging problems to create thriving cities, resilient environments, mission-critical outcomes, operational advancement, scientific discovery, and cutting-edge manufacturing, Jacobs is challenging itself to reinvent tomorrow by solving the world's most critical problems today. Our mission is to turn abstract ideas into realities that transform the world for the better.. With an annual revenue of approximately $16 billion and a talent force of more than 60,000, Jacobs provides a full range of professional services to both the government and the private sector including consulting, technical, scientific, and project delivery services.. Take a look at Jacobs' website.Connect with Jacobs on Facebook, Instagram, LinkedIn, and Xanga.com as well as on his website
Connect with Jacobs on Facebook, Instagram, LinkedIn, and Xanga.com as well as on his website
Amentum - What we do
Our mission at Amentum is to modernize government missions in the most efficient, effective, and effective manner possible by providing global engineering, project management and solutions integration services. As a team of innovative thinkers passionate about making a positive difference, we innovate to create a safer, smarter, cleaner world. Underpinned by a strong culture of ethics, safety and inclusivity, Amentum is fiercely committed to operational excellence and successful execution. For more information about how we solve what's next, please visit us at amentum.com.
Metrics that measure the performance of an operation
The following press release contains a number of operating metrics that management believes to be useful in evaluating the results of the transaction:. The combined backlog represents the amount of revenue the combined company expects to realize from work to be completed, including work to be completed by their consolidated subsidiaries, during the coming quarters. Amentum's backlog to revenue ratio represents the ratio of Amentum's backlog to the combined revenue of its separated businesses and Amentum together. It is calculated by adding the amount of indebtedness of Amentum and CMS expected to be outstanding at a point in time, minus the amount of cash and cash equivalents as of that point in time, divided by the adjusted earnings before interest, taxes, depreciation, and amortization of the 12-month period ending on that date.. As part of our regular operations, we monitor these operational metrics to evaluate our business, identify trends affecting our business, and make strategic decisions. We expect the combined company to evaluate these metrics in a similar manner as well.
As part of our regular operations, we monitor these operational metrics to evaluate our business, identify trends affecting our business, and make strategic decisions. We expect the combined company to evaluate these metrics in a similar manner as well.
In this press release, there are certain statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 of the United States of America.. It is important to note that forward-looking statements do not directly relate to historical or current events.. The use of words like "expects," "anticipates," "believes," "seeks," "estimates," "plans," "intends," "future," "will," "would," "could," "can," "may," "target," "goal" and similar words is intended to indicate forward-looking statements contained herein.. Our forward-looking statements include, but are not limited to, statements we make regarding our plans to spin off and merge with Amentum the CMS business and the above-mentioned portion of the DVS business. In this transaction, that is intended to be tax-free for U.S. stockholders, we will propose that the combined business or the combined company will be spun off and combined with Amentum.. federal income taxes purposes, Jacobs' and its stockholders respective ownership percentages in the combined company, the amount of cash proceeds and value to be derived by Jacobs from the transaction and the disposition of Jacobs' retained stake in the combined company, the expected timing, structure and tax treatment of the proposed transaction, our intent to maintain Jacobs' investment grade credit profile, the ability of the parties to complete the proposed transaction, the potential benefits and synergies of the proposed transaction, including future financial and operating results and strategic benefits, the description of the combined company's anticipated revenue, business and growth opportunities, and the combined company's plans, objectives, expectations and intentions, legal, economic and regulatory conditions, and any assumptions underlying any of the foregoing
federal income taxes purposes, Jacobs' and its stockholders respective ownership percentages in the combined company, the amount of cash proceeds and value to be derived by Jacobs from the transaction and the disposition of Jacobs' retained stake in the combined company, the expected timing, structure and tax treatment of the proposed transaction, our intent to maintain Jacobs' investment grade credit profile, the ability of the parties to complete the proposed transaction, the potential benefits and synergies of the proposed transaction, including future financial and operating results and strategic benefits, the description of the combined company's anticipated revenue, business and growth opportunities, and the combined company's plans, objectives, expectations and intentions, legal, economic and regulatory conditions, and any assumptions underlying any of the foregoing
Jacobs and Amentum's forward-looking statements are based on their current estimates and expectations, as well as current competitive, financial, and economic data available at this time. However, forward-looking statements are inherently uncertain, so you should not place undue reliance on them as actual results may differ materially from those stated in such statements.. It is important to note that there are a number of risks, uncertainties, and other factors that could cause actual results to differ materially from what is expressed, projected, or implied by our forward-looking statements.
It is important to note that there are a number of risks, uncertainties, and other factors that could cause actual results to differ materially from what is expressed, projected, or implied by our forward-looking statements.
Such factors include uncertainties as to the structure and timing of the proposed transaction, the impact of the proposed transaction on Jacobs and the combined company if the proposed transaction is completed, the possibility that the proposed transaction may not qualify for the expected tax treatment, the ability to obtain all required regulatory approvals, the possibility that closing conditions for the proposed transaction may not be satisfied or waived, on a timely basis or otherwise, the risk that any consents or approvals required in connection with the proposed transaction may not be received, the risk that the proposed transaction may not be completed on the terms or in the time-frame expected by the parties, unexpected costs, charges or expenses resulting from the proposed transaction, business and management strategies and the growth expectations of the combined entity, risk relating to the combination and integration of the businesses and the ability to implement its business strategy and realize the expected benefits, including the ability to realize the estimated synergies, the inability of Jacobs and the combined entity to retain and hire key personnel, customers or suppliers while the proposed transaction is pending or after it is completed, as well as other factors that may impact Jacobs or the combined business, such as competition from existing and future competitors in its target markets, financial market risks that may affect Jacobs or the combined business, including by affecting Jacobs' or the combined business' access to capital, as well as general economic conditions, including inflation and the actions taken by monetary authorities in response to inflation, changes in interest rates and foreign currency exchange rates, changes in capital markets, the impact of a possible recession or economic downturn on our results, prospects and opportunities, and geopolitical events and conflicts, the risk that disruptions from the proposed transaction will impact the Jacobs' or Amentum's business, the risk that the separation of the businesses from Jacobs may be more difficult than expected, a possible decrease in the trading price of Jacobs' shares, as well as factors related to our business or detailed from time to time in Jacobs' reports filed with the U. Commission of Securities and Exchange ("SEC"). As you have seen, the above factors and potential future developments are inherently uncertain, unpredictable and, in many cases, beyond our control.. For a description of these and additional factors that may occur that could cause actual results to differ from our forward-looking statements see our Annual Report on Form 10-K for the year ended September 29, 2023, and in particular the discussions contained therein under Item 1 - Business; Item 1A - Risk Factors; Item 3 - Legal Proceedings; and Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations, our Quarterly Reports on Form 10-Q, as well as Jacobs' other filings with the SEC. Unless required by applicable law, Jacobs is not under any obligation to update any of the forward-looking statements after the date of this presentation to conform to actual results, except as required by applicable law. Please take a moment to read carefully the risk factors, as well as the financial and business disclosures in our Annual Report on Form 10-K, our Quarterly Report on Form 10-Q, and in other documents that we file with the Securities and Exchange Commission from time to time.
Please take a moment to read carefully the risk factors, as well as the financial and business disclosures in our Annual Report on Form 10-K, our Quarterly Report on Form 10-Q, and in other documents that we file with the Securities and Exchange Commission from time to time.
Inquiries: Investor Relations and Corporate Development Jonathan Evans, Vice President, Investor Relations and Corporate Development: +1 (214) 583-8407
The media contact for Louise White, Senior Vice President, Corporate Communications, is +1 (469) 724-0810.
SOURCE Jacobs, The New York Times
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