Jacob enters agreement with John Wood for nuclear business acquisition

Jacob Engineering Group (JEC) has entered into an agreement to acquire John Wood Group's Nuclear business for an enterprise value of GBP250 million (approx. US$300 million) on a debt-free, cash-free basis. The transaction represents an enterprise value-to-expected pro forma calendar year (CY) 2019 adjusted EBITDA multiple of 7.9x, assuming GBP10 million (US$12 million) of full run-rate cost synergies from the combined organizations. Jacobs expects to close the acquisition by its fiscal 2020 second quarter.

The transaction, which is expected to close by Jacobs' fiscal 2020 second quarter, is subject to the satisfaction of customary closing conditions, including regulatory approvals. Jacobs has agreed to pay a fee of approximately US$9 million to John Wood Group in certain circumstances where the transaction is not cleared by the U.K. Competition and Markets Authority.

The agreement has been approved by each company's Board of Directors, is not subject to a financing condition, and does not require John Wood Group's shareholder approval. Jacobs expects to finance the transaction through cash on hand and existing credit facilities.

Rothschild & Co is serving as sole financial advisor to Jacobs, and Paul Hastings LLP is serving as legal counsel to Jacobs. Price Waterhouse Coopers is serving as financial advisor to John Wood Group, and Slaughter and May is serving as legal counsel to John Wood Group.