URS in deal to acquire Washington Group
San Francisco-based URS Corp. is buying Washington Group International Inc. for $2.6 billion in a corporate marriage that would create one of the country’s top engineering and construction powerhouses, the companies announced Monday.
Directors of both companies unanimously approved the deal, which calls for Washington Group stockholders to receive $43.80 in cash and 0.772 of a share of URS stock for each share in Boise, Idaho-based Washington Group.
The transaction was valued at $80 a share, or a 14% premium over Friday’s closing price for Washington Group’s stock. The markets were closed Monday for the Memorial Day holiday.
The deal, subject to approval by stockholders and regulators, is expected to close this year, the companies said.
“URS has a history of anticipating change in the industry, and this transaction is the next logical step in building for future growth,” URS Chief Executive Martin Koffel said, noting the firms’ strength in power production and infrastructure and environmental management.
The combined company, to be called URS, would have an order backlog of more than $11 billion in more than 50 countries. The two companies currently have 54,500 employees worldwide.
The deal is designed to give the companies additional heft in a competitive global arena. In April, URS led the Engineering News-Record’s annual ranking of top 500 design firms.
Federal contracting would be key for the new company, whose combined 2006 revenue is $7.6 billion, the fourth-highest among . publicly-traded engineering and construction companies.
The new company would be one of the top five providers of defense technical services. This month, URS was one of two companies that won a contract to help manage post-disaster housing inspection services for the Department of Homeland Security’s Federal Emergency Management Agency.
This year, activists attacked Sen. Dianne Feinstein (D-Calif.) for having an alleged conflict of interest because she held key positions on the Senate’s military construction appropriations subcommittee while her husband, Richard Blum, had financial interests in URS. Feinstein’s office denied any ethical problems.
