The world’s fourth biggest engineering design firm is set to acquire a major engineering and construction outfit in a deal worth around $US4 billion which would create a combined entity with around $19 billion in annual sales and 95,000 employees.
In a statement, Los Angeles based AECOM Technology Corporation said it had entered into an agreement to purchase San Francisco based URS Corporation for $US56.31 per share.
The two companies said the deal would see URS’s strength in sectors such as oil and gas, infrastructure, power and industrial projects combine with AECOM’s strategy of offering integrated infrastructure and support services and would generate $US250 million in annual cost savings.
AECOM president and chief executive officer Michael S. Burke welcomed the deal – which remains subject to approval from regulatory authorities and stock holders of both companies but has been unanimously approved by the URS board – saying it would create a world leading firm in markets such as transportation, facilities, environment, energy, water and government.
“This combination creates an industry leader with the ability to deliver more capabilities from a broad global platform to reach more clients in more industry end markets,” he said.
“In one step, we will dramatically accelerate our strategy of creating an integrated delivery platform with superior capabilities to design, build, finance and operate infrastructure assets around the world.”
URS chairman and chief executive officer Martin M. Koffel added that the two companies shared complementary portfolios of work and compatible cultures. He said the new arrangement would better position URS to compete for major projects.
Originally started in 1957 as a research group in physical and engineering sciences, URS now has more than 50,000 staff and operates across a range of disciplines including program management; planning, design and engineering; systems engineering and technical assistance; construction and construction management; operations and maintenance; management and operations; information technology; and decommissioning and closure services.
Both URS and AECOM – which was ranked by Engineering News-Record as the fourth biggest engineering design firm last year – were active in working on The World Trade Centre in New York and London Olympic Park, while URS also worked on the London Crossrail and Millennium Park in Chicago.
AECOM says it has received a commitment from the Bank of America regarding financing of the transaction.
If approved, the transaction is expected to close in October.