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Jacobs to expand nuclear portfolio through deal with John Wood
Posted on Tuesday, 20 August 2019 13:46
Jacobs Engineering Group has agreed to buy UK-based John Wood Group’s nuclear business for an enterprise value of GBP 250.00 million on a debt- and cash-free basis.

Proceeds from the deal will be used to reduce the vendor’s debt.

The consideration represents a multiple of around 12.4x the target’s 2018 earnings before interest, taxes, depreciation and amortisation (EBITDA) of GBP 20.20 million.

Due to close during the buyer’s second quarter of fiscal 2020, the transaction remains subject to regulatory approvals.

Jacobs will also pay John Wood a fee of GBP 7.50 million if the deal is not cleared by the UK Competition and Markets Authority.

Both companies’ boards have approved the purchase, which will be funded via cash on hand and existing credit facilities.

The target provides a range of technical and consulting services across the nuclear sector for customers in the UK.

Its activities include decommissioning, nuclear new build and operational support within the civil nuclear and defence segments.

The group has over 2,000 employees and expects to generate over GBP 285.00 million in revenue by the end of 2019.

A deal will help strengthen Jacobs’ position as a Tier-1 global nuclear services provider and expands its offerings in defence, environmental energy and clean energy through its USD 1.20 billion portfolio.

Furthermore, the transaction allows the buyer’s existing aerospace, technology and nuclear division to grow across the UK, as well as in the European and Asian markets.

David Kemp, John Wood’s chief financial officer, said: “Although our nuclear business is a strong UK player and has performed well, we see better opportunities to develop clear global leadership positions across other parts of our business.”

Jacobs expects the deal to increase its earnings between USD 0.10 and USD 0.12 in the first full year following closing and eventually post savings of around USD 12.00 million.

On a pro-forma basis, the buyer will have net debt to pro forma adjusted EBITDA of under 1.0x.

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