Jacobs to Pay $1.2 Billion for Engineer Sinclair Knight MerzDavid Fickling
Jacobs Engineering Group will pay A$1.3 billion ($1.2 billion) to buy Sinclair Knight Merz, or SKM, an Australian engineer which is helping to develop an African iron ore mine for Rio Tinto Group.
The deal will be complete by the end of December, Pasadena, California-based Jacobs said in a regulatory statement yesterday. Employee-owned SKM will hold shareholder votes on the proposal in November or December, according to a separate statement from the Sydney-based company.
Jacobs, the third-largest listed U.S. engineer, has been trying to match the $16.7 billion order book it held at the end of its 2008 financial year. The acquisition will give Jacobs operations in Australia, Asia, South America and the U.K. with revenue of about A$1.3 billion during 2012, according to the statement, compared to Jacobs’ own $10.89 billion.
“Our capabilities and geographies have little overlap,” Craig Martin, Jacobs president, said in a statement. The deal will allow the combined group to “expand client relationships and provide significant opportunities for employees.”
The deal is only the third proposed acquisition of an Australian company worth more than $1 billion to be announced this year, according to data compiled by Bloomberg.
Jacobs has worked on projects including a new wing at the Art Institute of Chicago and light-rail systems in Houston, Salt Lake City, and San Jose.
SKM also helped manage public transport planning for the London 2012 Olympic Games and managed the building of new service stations for Royal Dutch Shell Plc in Asia, Africa, and eastern Europe, according to its website.
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