WorleyParsons Completed the Acquisition of Jacobs ECR Division

  • Apr 29, 2019 AEST
  • Team Kalkine
WorleyParsons Completed the Acquisition of Jacobs ECR Division
Leading global professional services company, WorleyParsons Limited (ASX: WOR) has completed the much-awaited acquisition of Jacobs Engineering Group Inc.’s Energy, Chemicals and Resources division (Jacobs ECR). The company has paid a total consideration of US$3.2 billion (A$4.55 billion) to complete the acquisition. It is expected that the new merged business will provide professional project and asset services in energy, chemicals and resources sector. Moreover, the new merged business will have 57,600 employees across 51 countries. On 22 October 2018, the company had announced that it has entered into a binding agreement for the acquisition of the Jacobs ECR division and at that time it had also signed a Stock and Asset Purchase Agreement (SAPA). As per the initial agreement, the company was going to acquire the Jacobs ECR division for an enterprise value of US$3.3 billion. However, the SAPA was amended and restated, reducing the enterprise value to US$3.2 Bn (A$4.55 Bn). The reduction in the enterprise value was due to the movement of the WorleyParsons share price affecting the equity component of the consideration. Jacobs ECR is a leading global technical services provider across Hydrocarbons, Chemicals and Mining & Minerals sector, ranked number one globally for its delivery of complex petrochemical and chemical projects. It is expected that new merged business will create cost synergies of around A$130 million at a cost of A$160 million which will be delivered within two years of completion. The company is expecting to receive further benefits from optimization and revenue synergies. While completing on the completion of this acquisition, the company’s CEO Mr. Andrew Wood told that this merger is about more than capacity and capability. According to him, this merger is an opportunity for the company to become the partner of choice for its customers, the employer of choice for its people and to deliver enhanced returns for its shareholders. Further, the company has adopted ‘Worley’ as its new brand and its name will now be changed to Worley Limited, subject to the approval of members at the AGM in October 2019. The company is going to host an annual Investor Day wherein it will provide a more detailed update on the new company. Now, let’s have a glance at the company’s stock performance and the return it has posted over the past few months. The stock is trading at a price of $14.500, up by 0.207% during the day’s trade with a market capitalisation of ~$6.67 billion as on 29 April 2019 (AEST 11:31 AM). The counter opened the day at $14.480 and reached the day’s high of $14.690 and touched a day’s low of $14.360 with a daily volume of ~ 185,802. The stock has provided a year till date return of 27.6% & also posted returns of 1.62%, 5.54% & 4.48% over the past six months, three & one-month period respectively. It had a 52-week high price of $20.028 and touched 52 weeks low of $10.720, with an average volume of ~1,350,812.

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