Having just completed its $3.27 billion buyout of CH2M, Dallas-based Jacobs Engineering released new information Monday about its business going forward as a $15 billion engineering and infrastructure heavyweight.
“Today, we are celebrating the creation of a new Jacobs,” Chairman and CEO Steve Demetriou said in a news release.
In the release, Jacobs praised CH2M’s role in managing major environmental and nuclear remediation projects, such as those in the Department of Energy weapons complex. This should dovetail well with its new owner’s “complementary experience with government agencies in nuclear decommissioning,” Jacobs said.
Jacobs thinks this represents a growing market with $145 billion in annual opportunities – a figure that includes both domestic and international markets. When asked, Jacobs spokeswoman Lorrie Crum said the company does not make public predictions on how much of that market it expects to capture.
The company announced Monday that it would streamline operations into three global lines, down from four, in mid-2018. The company’s work for DOE and its semiautonomous National Nuclear Security Administration would presumably be located in its Aerospace, Technology, Environmental, and Nuclear (ATEN) division. This group will be led by Terry Hagen, Jacobs said in a filing with the U.S. Securities and Exchange Commission. Hagen is currently president of aerospace and technology at Jacobs.
The other two remaining business units at Jacobs will be Buildings, Infrastructure, and advanced Facilities (BIAF); and Energy, Chemicals, and Resources (ECR).
CH2M, based in the Denver suburb of Englewood, Colo., brings a large DOE cleanup portfolio to Jacobs. CH2M has key roles at the Hanford Site in Washington state and the Oak Ridge Reservation in Tennessee. It is also leads a team that in October took over remediation of the Paducah Gaseous Diffusion Plant in Kentucky.
Jacobs is part of a team that in May won a contract to operate of the Nevada National Security Site for the National Nuclear Security Administration. Jacobs is also part of the Mission Support Alliance team that holds the support services contract at Hanford – though it plans to divest that asset to avoid conflict of interest at the DOE site.
The merger proposal, first announced in August, was approved by about 96 percent of CH2M shareholders on Dec. 13.
In the SEC filing, Jacobs said former CH2M board member Barry Williams has joined the Jacobs Board of Directors. Williams’ appointment takes effect immediately. He will serve for an initial term that expires in 2019.
Jacobs reaffirmed its adjusted guidance for its earnings per share for fiscal 2018 in the range of $3.55 to $3.95. It will retain its investment-grade credit rating, although the company did not specify from which of the major credit ratings services.
