Business services provider Jacobs Solutions said it will spin off its subsidiaries Critical Mission Solutions and Cyber (CMS) along with Intelligence Government Services. The split companies will combine with Amentum, technology solution provider, to create a new, publicly-traded firm in the government services sector.
Jacobs said it will receive $1 billion cash dividend at closing of the deal along with additional value after the close through a disposition of retained stake in the combined company.
The firm said John Heller, CEO of Amentum, will serve as chief executive officer of the combined company, while Steve Demetriou, executive chair of Jacobs will be positioned for the same title in the combined company.
The firm said the combined company formed will initiate with $13 billion combined revenue as organizational restructure, with more than 80% from prime contracts serving the full program life cycle for government clients, and with 53,000 employees.
The Texas based firm said it estimated $50 to 70 million of net cost synergies. Additionally, both organizations have track records of effective synergy realization also will work to target additional synergies during integration.
The company said its shareholders and Jacobs will own 58.5%-63% of the combined company’s shares upon the deal close, consisting of 51% its shareholder’s ownership and its retaining 7.5%-12%.
“By separating CMS and associated Cyber and Intelligence Solutions, Jacobs will streamline our business portfolio and transform into a more focused, higher-margin company more closely aligned with key global mega trends,” said Bob Pragada, chief executive of Jacobs.
“We believe this transaction is in the best interests of the company and our stakeholders, gaining the benefits of a tax efficient transaction, plus even greater value with significant cash proceeds and future realization of synergies,” Pragada added.
