The planned AECOM acquisition of URS would bring additional capabilities to AECOM including oil and gas sector experience and Department of Energy work, AECOM CEO Mike Burke said yesterday. The companies announced last weekend that they had reached an agreement in which AECOM would acquire all outstanding URS shares for a total of $4 billion, or $56.31 per share. “When we looked at the two companies we certainly saw significant new capabilities and market expertise that would fit well within our organization. More than half of their business is entirely complimentary to ours in markets or services that we do not provide today. The URS exposure in oil and gas, power, nuclear and industrial EPC are markets that we are not playing in today,” Burke said in a call with investors, adding, “Their DOE end market, which is very significant, is a market that we barely touch today. So when you compare all of the different complimentary services, the strategic rational fit quite well.”
URS CEO Martin Koffel told investors that there would be benefits for URS as well. “URS will gain an expanded presence in the U.S. and global commercial and public buildings markets,” he said. “AECOM will benefit from our strong sector experience in important end markets including oil and gas, a higher growth market, government services. The combined company will be better positioned in growing global markets.”
The companies plan to close the deal this October. Burke will be the combined company’s CEO while AECOM Executive Chairman John M. Dionisio will be chairman of the board, and the management structure will include executives from both companies and two URS representatives on the Board of Directors. “We’ve got a roster of mature presidents who run very very large divisions and they are coming across to the combined company,” Koffel of URS said. “They bring with them considerable integration ability and considerable ability to operate large companies.”
The structure of the combined organization will remain similar to how it currently is at both AECOM and URS, Burke said. “We have large geographic footprints and we have large service types, such as our federal services division that is operated independently today, which would be operated independently tomorrow,” he said. “The construction business is separate from the design business, and then you have the design business operated by three major geographies: Asia Pacific, the Americas and then Europe, Middle East and Africa.”
