AECOM to acquire URS
18 July 2014Aecom and URS Corporation announced on July 13 the execution of a definitive agreement under which Aecom will acquire all outstanding shares of URS for a combination of cash and stock valued at approximately USD 4bn or USD 56.31 per URS share, based on the AECOM closing share price as of July 11, 2014. Including the assumption of URS debt, the total enterprise value of the transaction is approximately USD 6bn.
The combined company will be a leading, fully integrated infrastructure and federal services provider with more than 95,000 employees in 150 countries. It would have calendar year 2013 pro forma revenues of more than USD 19bn.
"This combination creates an industry leader with the ability to deliver more capabilities from a broad global platform to reach more clients in more industry end markets," said Michael S. Burke, AECOM president and chief executive officer.
Martin M. Koffel, chairman and chief executive officer of URS, stated, "This is a compelling strategic combination that we believe will benefit our clients, stockholders and employees. URS stockholders will receive significant, immediate value from the transaction and will be able to participate in the future prospects of the combined company, which we expect will be better positioned to compete for major, complex projects across a diverse range of end markets and geographic regions."
Aecom will become one of the largest companies by revenue in the engineering and construction industry. The combined firm will be headquartered in Los Angeles and will be the largest publicly traded company in that city. Aecom also expects to maintain a key operational presence in San Francisco, where URS is headquartered.
Michael S. Burke will be the combined company's chief executive officer, and the companies have designed a new operating management structure that will include proven senior leaders from both URS and AECOM. John M. Dionisio, Aecom executive chairman, will be chairman of the board and, at closing, AECOM will elect two URS board members to the Aecom Board of Directors.
The terms of the definitive agreement have been unanimously approved by the Boards of Directors of both companies. The transaction is subject to customary closing conditions, including regulatory approvals, approval by URS stockholders of the merger agreement, and the approval by AECOM stockholders of the issuance of shares in the transaction. The transaction is expected to close in October 2014.
"Building on AECOM's experience of adding new skill sets and delivering them across our established global platform, we anticipate a smooth and seamless integration," said Burke. "We are developing integration plans that will enable us to bring together the best of both organizations. The process will be led by executives of both companies."
