(818) 547-4500 E-mail: bwalko@sokoloffco.com
Transaction
Case Studies

Peter A. Sokoloff & Co. regularly analyzes transactions which occur within the industries covered. An archive of these case studies is kept online as a courtesy to our colleagues. To receive by e-mail new case studies as they are prepared, please e-mail bwalko@sokoloffco.com with your contact information.

Archives > Transaction Case Study 74

SOKOLOFF & COMPANY CASE STUDY:
AECOM Acquires URS Technologies

DATE ANNOUNCED: July 13, 2014
BUYER: AECOM Technology Corporation (NYSE: ACM) 
SELLER: URS CORPORATION (NYSE: URS)    
PURCHASE PRICE: $56.31 per share in cash and shares of ACM stock, approximately $4 billion.
FORM OF PURCHASE PRICE:  AECOM will pay US$56.31 per URS share, based on AECOM’s closing price on July 11, 2014, representing a premium of 19% over the trailing 30-day average closing price of URS shares ending July 11, 2014.  URS stockholders will receive per share consideration equal to US$33.00 in cash and 0.734 shares of AECOM common stock for each URS share.  URS stockholders may elect to receive all cash or all stock consideration, subject to proration in the event of oversubscription. The election will be subject to a customary proration mechanism to achieve an aggregate consideration mix of approximately 59% cash and 41% AECOM common shares.  The stock portion of the consideration is expected to be tax-free to URS stockholders.

SELLER’S FINANCIAL INFORMATION AND M&A MULTIPLES

Year 2012 2013 Trailing Twelve Months
through
April 4, 2014

Revenue

$9.97B

$10.99B

$10.72B

EBITDA

$804.8M

$765.2M

$789.40M

Cash

 

 

$470M

Debt

 

 

$2.12B

Purchase Price

 

 

$4B

Enterprise Value

 

 

$5.65B

Multiple of Revenue

 

 

.53

Multiple of EBITDA

 

 

7.16

TRANSACTION DRIVERS: 
Both companies said that the acquisition would create an industry leader creating more opportunities for clients, employees and stockholders.  Martin Koffel, Chairman & CEO of URS said “We expect the company will be better positioned to compete for major, complex projects across a diverse range of end markets and geographic regions… Our two businesses are complementary, and our cultures are highly compatible.”

SOKOLOFF COMMENTARY:
Size does matter to some extent.  After Fluor (FLR), with the addition of URS, Aecom becomes the 2nd largest US engineering and construction company.   The combined company will have 95,000 workers in 150 countries, sales of $19 billion and adjusted EBITDA of $1.3 billion.

ACM predicts integration synergies of $250 million.  URS brings a sizable client portfolio in construction, oil & gas, power and government services, which should complement ACM’s architectural and engineering businesses.

ACM’s stock rose on the news and investor sentiment is mildly optimistic.  The plan seems right and, if the integration is successful, ACM will emerge a better company. 

Return to Archives