Jacobs to Acquire Remaining Stake in PA Consulting

Core Insights - Jacobs has agreed to acquire the remaining shares of PA Consulting for £1.216 billion ($1.6 billion), enhancing its position in high-value advisory and transformation sectors [1][2] - The acquisition is expected to be accretive to Jacobs' adjusted EPS within the first 12 months post-closure, which is anticipated by the end of Jacobs' fiscal 2026 second quarter [1][10] - The transaction aims to strengthen Jacobs' end-to-end asset lifecycle capabilities and expand its presence in high-growth sectors such as advanced manufacturing and life sciences [11] Transaction Details - The total upfront consideration for PA Consulting reflects a valuation of approximately £3.05 billion, equating to 13.0x expected calendar year 2025 adjusted EBITDA before synergies [2] - The deal includes £75 million in deferred consideration, payable in Jacobs' shares on the second anniversary of the transaction closing [2][7] - Jacobs plans to fund the cash portion of the upfront consideration through a combination of cash-on-hand and existing debt facilities [7] Strategic and Financial Rationale - The acquisition is expected to enhance Jacobs' ability to deliver a full asset lifecycle, positioning it as a more comprehensive partner to clients [4][5] - Full ownership of PA Consulting will allow for broader collaboration in joint bids, potentially increasing win rates for business opportunities [11] - The combined capabilities of Jacobs and PA Consulting are well-suited to meet the growing demand for comprehensive solutions in sectors like AI data centers and critical infrastructure resilience [11] Leadership Perspectives - Jacobs' CEO Bob Pragada emphasized that the acquisition marks a key milestone in their strategy to redefine the asset lifecycle and enhance margin profiles through synergies [3] - PA Consulting's CEO Christian Norris highlighted the potential for the combined expertise to empower clients in navigating complexities and seizing future opportunities [3] Expected Financial Impact - The transaction is projected to increase Jacobs' adjusted EBITDA margin post-close, with expected cost synergies of £12-15 million targeted within 24 months [11] - If Jacobs had fully owned PA Consulting for FY25, the adjusted EBITDA margin would have been 14.5%, compared to the actual margin of 13.9% [11]