Jacobs agrees to buy CH2M, including Hanford contract

Jacobs Engineering Group has reached an agreement to purchase CH2M Hill for $2.85 billion, the companies announced Wednesday.

CH2M Hill, of Denver, is the owner of CH2M Hill Plateau Remediation Co., a Department of Energy contractor at the Hanford nuclear reservation.

It employs about 1,700 people and is responsible for environmental cleanup at Hanford, with the exception of radioactive waste held in underground tanks. One of its key current projects is demolishing Hanford’s Plutonium Finishing Plant. It also operates treatment systems cleaning contamination from groundwater.

Jacobs, based in Dallas, is one of three owners of Mission Support Alliance, with Leidos the lead owner. Mission Support Alliance employs about 1,900 people.

“We are delighted about the prospects of combining CH2M and Jacobs,” said CH2M Chairman Jacqueline Hinman. “Since late 2014, we’ve been transparent about our plans to pursue an ownership transition, providing sustained access to capital for growth.”

Jacobs said in a statement that the purchase better positions the company for government contracts. The agreement comes as DOE prepares to rebid its three largest Hanford cleanup contracts, including those held by CH2M Hill Plateau Remediation Co. and Mission Support Alliance, before they expire in 2018 and 2019. The third is the contract to manage Hanford tank farms.

Nuclear-related projects require specialized capabilities that are difficult to replicate, according to Jacobs.

“CH2M’s preeminent brand for program and project delivery in large-scale environmental remediation in the nuclear industry, coupled with Jacobs’ complementary experience with governmental agencies around the world, including nuclear decommissioning, create significant business expansion opportunities,” Jacobs said.

The deal includes a cash and stock transaction of $3.27 billion, including Jacobs acquiring $415 million of CH2M debt. It could close late this year.

CH2M stockholders would own 15 percent of Jacobs shares.

Jacobs operates in more than 25 countries, providing technical, professional and construction services. It employs about 54,000 people.

This story was originally published August 2, 2017 at 12:29 PM with the headline "Jacobs agrees to buy CH2M, including Hanford contract."