Jacobs Engineering Group Inc.
) recently announced its plans to acquire the Australia-based
professional services firm, Sinclair Knight Merz for AUS$1.3
billion (or $1.2 billion as on the date of announcement).
Formed in 1964, as a private company, Sinclair Knight Merz is
a leading projects firm, providing strategic consulting,
engineering and project delivery. The company operates across
many regions, including Asia Pacific, the Americas, Europe, the
Middle East and Africa, serving markets such as Mining and
Metals, Building and Infrastructure, Water and Environment, and
Power and Energy.
Sinclair Knight Merz generated revenues of roughly $1.2
billion (AUS$1.3 billion) in 2012. The two companies have
compatible cultural values as well as operating philosophy. The
merger is expected to be a strategic fit from which both the
companies are expected to benefit.
Jacobs and Sinclair Knight Merz have minimal geographic
overlap, giving both the companies a scope to gain a greater
market share as well as a diversified client base in the future.
Moreover, the combined entity will have a stronger balance sheet,
giving it a scope to grow further inorganically.
The transaction, subject to the approvals of Sinclair Knight
Merz's shareholders and the Australian Federal Court, is expected
to close by the first quarter of fiscal 2014.
Jacobs has been trying to expand its portfolio inorganically.
In June, Jacobs acquired a privately-held telecommunications
solutions provider, Compass Technology Services, Inc. The
financial terms of the deal were not disclosed. This strategic
move of purchasing Compass will enhance Jacobs' efficiency in the
telecommunications infrastructure design and construction. Not
only will Jacobs' product offerings increase, but the company
will also become geographically diverse, since Compass has a
significant presence in the Southeastern U.S.
Jacobs is one of the leading providers of professional,
technical and construction services to industrial, commercial and
governmental clients. The company provides its services through
more than 200 offices and subsidiaries located principally in
North America, Europe, Asia and Australia. Jacobs currently has a
market capitalization of $7.6 billion.
Jacobs carries a Zacks Rank #3 (Hold). Other stocks worth a
watch in the construction sector are
Michael Baker Corporation
Standard Pacific Corp.
). While Michael Baker carries a Zacks Rank #1 (Strong Buy),
Standard Pacific and VSE Corp. carry a Zacks Rank #2 (Buy).
BAKER (MICHAEL) (BKR): Free Stock Analysis
JACOBS ENGIN GR (JEC): Free Stock Analysis
STANDARD PAC (SPF): Free Stock Analysis
VSE CORP (VSEC): Free Stock Analysis Report
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