U.S. technical service company, Jacobs Engineering Group, has recently decided to sell its resources, chemicals and energy business to Australia’s engineering firm, WorleyParsons Ltd. for over $3.3 billion, a deal that would double the size of the WorleyParsons’ current engineering operations.
According to The West Australian, Andrew Wood, CEO of WorleyParsons, said that the company is thrilled to combine its global platform with Jacobs ECR’s world-class capabilities, to eventually create a leader across WorleyParsons’ key focus sectors, with greater earnings diversification and resilience.
The transaction will also expand its exposure to the refining and petrochemicals sectors, as the revenue streams are less volatile than oil and gas exploration and production sectors, where WorleyParsons currently dominates, Woods added.
Reportedly, the transaction follows Jacobs’ $3.3 billion acquisition of rival CH2M Hill Cos Ltd. and the $2.9 billion (2.2 billion-pound) takeover of Amec Foster Wheeler by UK oilfield services firm John Wood Group.
As per an official statement, Jacobs, the largest service provider to the NASA space program, said that their firm after the sale would focus on higher growth and margin lines of business including aerospace, technology and nuclear projects as well as buildings and infrastructure.
The acquisition would make WorleyParsons the world’s biggest provider of professional services in energy and resources, with a large footprint in Europe and North America, complementing its exposure in the Middle East and Asia, Jacobs said.
Commenting on the deal, Jacobs added that the company would receive $2.6 billion in cash plus $700 million worth of shares giving it an 11% stake in the enlarged WorleyParsons.
Steve Demetriou, Chairman and CEO of Jacobs, was quoted saying that the transaction would mark as an inflection point to their firm’s portfolio transformation focused on more consistent, higher-margin growth as a leader solving the world’s critical challenges.
Sources close to the deal cite that the sale has been approved by both the parties and is expected to close in the first half of 2019.