California-based Jacobs Engineering has confirmed it will proceed with a $1.3 billion takeover of of Australia’s Sinclair Knight Merz, in what is set to be one of the biggest merger deals in the global engineering sector in recent years.
Reports first emerged at the start of September that New York-listed Jacobs Engineering planned to acquire SKM as part efforts to expand its operations in Australia, with industry observers pointing to the similarities between the two firms.
Jacobs has now confirmed the plan with a statement submitted to the New York Stock Exchange, indicating that it would take over SKM at a price reflecting an enterprise value of $1.2 billion, plus adjustments for cash, debt and other items.
The deal is one of very few to exceed the billion dollar threshold in the international engineering space, and is expected to have a transformational impact upon the global industry.
Craig Martin, president and chief executive of Jacobs Engineering, highlighted the extensive synergies existing between SKM and his own company
"SKM's culture, values and operating philosophy are very compatible with ours, making our companies an excellent fit for one another," Mr. Martin said.
"Our capabilities and geographies have little overlap, enabling us together to continue to expand our client relationships and provide significant opportunities for our employees. We are enthusiastic about the potential."
Santo Rizzuto, SKM's chief executive, said the merger would enhance SKM's overseas reach and give it the opportunity to become part of a true global player in the engineering sector.
"This is an exciting opportunity. It uniquely positions us amongst our global peers and opens the way for us to achieve even greater things in future," said Mr. Rizzuto.
"It adds scale, diversification and growth opportunities to our business."
SKM is an employee-owned firm established in 1964, and following its successes in Australia has striven to establish itself as a major global player.