Jacobs Engineering is unloading its energy and resources business for $3.3 billion
- Jacobs Engineering announced it has agreed to sell its Energy, Chemicals, and Resources business to WorleyParsons for $3.3 billion.
- The transaction pays Jacobs shareholders $2.6 billion cash and $700 million of WorleyParsons shares.
- Jacobs Engineering shares rallied more than 8% on the news.
- Watch Jacobs Engineering trade in real time here
Jacobs Engineering announced Monday it has agreed to sell its Energy, Chemicals and Resources (ECR) segment to the Australia-based WorleyParsons for $3.3 billion. Shares are up 8% following the news.
Jacobs said it has entered into a definitive agreement to transfer its ECR business to its engineering-services provider WorleyParsons via $2.6 billion in cash and $700 million in WorleyParsons ordinary shares. After the transaction, Jacobs will be focused solely on its two better performing business - Aerospace, Technology, Environmental & Nuclear (ATEN) and Buildings, Infrastructure & Advanced Facilities (BIAF).
"For Jacobs, this transaction marks an inflection point in our portfolio transformation focused on more consistent, higher-margin growth as a leader solving the world's critical challenges," Jacobs CEO Steve Demetriou said in a press release.
"The increased financial flexibility we gain from this sale better positions us to invest in our ATEN and BIAF businesses, focusing our premier talent and expertise on technology, innovation and sustainable solutions that are priorities for our infrastructure and government services clients. These capabilities, along with our strong backlog and efficient global platform, will further strengthen our global leadership in these segments to drive meaningful value creation."
Demetriou added that the deal won't affect Jacob's adjusted earnings-per=share guidance for fiscal 2019, which is between $5.00 and $5.40 according to its quarterly filing posted on August 6.
Jacobs is set to report its fiscal year 2018 results on November 20. Its shares have gained 8% this year through Friday.
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