In a long-awaited development that figures to send ripples throughout the Energy Department’s Cold War nuclear cleanup program, Jacobs Engineering of Dallas will acquire engineering services company CH2M for $2.85 billion in cash and stock.
Jacobs will also assume $416 million of CH2M debt under the transaction, which is expected to close in the fourth quarter of this year, according to a press release issued Wednesday morning. After the deal closes, CH2M will become a wholly owned Jacobs subsidiary, and someone from CH2M will get a seat on the combined company’s board.
CH2M is a near-ubiquitous presence of the DOE nuclear complex. The company has a major role on five legacy cleanup sites managed by DOE’s Office of Environmental Management (EM) and is the lead industry partner at three of those. In its largest EM project, CH2M leads the mostly-solid-waste cleanup of the central plateau at the Hanford Site in Washington state. Awarded on Oct. 1, 2008, the deal worth up to $5.8 billion includes a five-year option exercised in 2013 that expires on Sept. 30, 2018.
CH2M is also actively competing for two multibillion-dollar cleanup contracts DOE plans to award later this year. The company is leading a bid to take over legacy remediation at the Los Alamos National Laboratory in New Mexico, a contract estimated to be worth $1.7 billion over 10 years, including options. CH2M is also a partner on an AECOM-led bid for a follow-up Savannah River Site liquid waste contract valued at roughly $6 billion over 10 years, including options. DOE expects to award the pact by Dec. 31.
Until 2015, CH2M was wholly owned by its employee shareholders. Hurting for capital and bulked up operationally for business that never materialized, the company in 2015 sold a minority stake to Apollo Global Management of New York. A year later, the company completed a restructuring that trimmed its global headcount by 800, or a roughly 3 percent cut from 22,000 heads before the changes.
By the time the acquisition was made official, it had been an open secret for years that CH2M was under pressure to find a buyer.
In slides briefed to members of the public in a Wednesday morning conference call, the company said that after the acquisition, “CH2M’s leadership in nuclear remediation and our full service environmental capabilities, combined with Jacobs’s complementary presence in nuclear facilities, [will] create a leader in nuclear and environmental solutions.”
