LOS ANGELES—AECOM Technology Corp. has entered into an agreement to purchase the outstanding shares of URS Corp. for $56.31 per share, a price that amounts to $4 billion. AECOM will purchase the company with a combination of cash and stock as well as the assumption of URS’s debt for a total transactional value of $6 billion.
The purchase price is based on the closing stock price on July 11, 2014 with a premium of 19% over the trailing 30-day average. According to AECOM president and CEO Michael S. Burke, the merger will produce an industry-leading firm with a greater global reach that will benefit stockholders and employees. Together, the company will have 95,000 employees in more than 150 countries and a pro-forma 2013 revenue of $19 billion. The combined company will be headquartered in Los Angeles, where AECOM is headquartered currently, but will maintain a strong presence in San Francisco, where URS is currently headquartered.
Per the terms of the transaction, URS stockholders will receive $33.00 per share in cash and .734 shares of AECOM stock per URS share owned. AECOM estimates the merged company will be accretive in GAAP earnings per share and 25% accretive to cash earnings per share in the fiscal year of 2015. The terms of the transaction have been unanimously approved by the boards of both companies and are subject to customary closing conditions. AECOM has secured a commitment from Bank of America to provide debt financing for the transaction, which, at closing, will amount to $5.2 billion in outstanding debt.
The two firms will be fully integrated. URS augments AECOM’s construction capabilities and expertise in end markets, like oil and gas and government services.
In addition to this merger, AECOM’s recently launched AECOM Capital is busy investing in notable development projects throughout the city by utilizing a fund model. GlobeSt.com recently spoke with John Livingston, AECOM Capital’s CEO to find out about the innovative business model and the company’s upcoming L.A. projects.