Jacobs in $1bn critical systems, cybersecurity spinout
US consultancy Jacobs is to spin out its Critical Mission Solutions (CMS) and Cyber & Intelligence Solutions (CIS) government services businesses into a joint venture.
The venture with Amentum, a leading global engineering and technology solutions provider, will create a new, publicly-traded player in the government services sector with revenue of $13bn .
The Cyber & Intelligence Solutions, which share significant strategic and operational synergies with CMS, generated $807 million in revenue in 2023, 85% of the Divergent Solutions business. Excluding the businesses being separated, Jacobs generated approximately $10.9 billion in revenue in the last financial year.
Jacobs will retain its next-generation data solutions and digital technologies business, which is part of its DVS segment and core to delivering digitally enabled critical infrastructure, transportation and manufacturing.
The aim is to streamline Jacobs, which is the majority owner of PA Consulting in the UK, with a focus on infrastructure such as fusion energy and the grid, and raises $1bn.
“By separating CMS and associated Cyber & Intelligence Solutions, Jacobs will streamline our business portfolio and transform into a more focused, higher-margin company more closely aligned with key global mega trends,” said Bob Pragada, CEO of Jacobs.
“We believe this transaction is in the best interests of the company and our stakeholders, gaining the benefits of a tax efficient transaction, plus even greater value with significant cash proceeds and future realization of synergies. I am confident the CMS and Cyber & Intelligence Solutions teams are poised for continued success in their new chapter as part of a more focused, independent public company that will be a leading player in the critical mission government services space – with both breadth and depth of capabilities across a more diversified portfolio.”
“Uniting our great organizations – Amentum, CMS, and Cyber & Intelligence Solutions – creates a leading provider of systems integration and technology solutions with the talent, scope, scale and footprint to deliver excellence and a wider range of solutions for our clients,” commented Amentum CEO John Heller. “Our combined company will deliver extensive expertise in the government’s highest priority areas of energy, space exploration, intelligence and analytics, and digital modernization. We look forward to the union of our strong teams and a bright future ahead.”
Upon completion of the deal, Jacobs Executive Chair Steve Demetriou will become Executive Chair of the combined company. John Heller, current CEO of Amentum, will serve as CEO of the combined company and sit on the combined company’s board, and Dr. Steve Arnette, EVP and President of CMS will serve as the COO.
“Over the last eight years, our focus has been to drive a cultural and business transformation to position Jacobs as a technology-enabled solutions provider and one of the world’s most innovative companies,” said Steve Demetriou. “I look forward to working alongside John, Steve and the board to help bring that same dedicated focus to successfully launch this new public company and deliver significant value-added opportunities for clients, shareholders and employees.”
Jacobs and its shareholders will own 58.5%-63% of the combined company and Jacobs will expects to receive $1bn cash from the deal, which is expected to close in the second half of 2024.