Three industry sources said recently Fluor’s government services group, if not the entire company, could be an acquisition target for another player in the nuclear cleanup industry, Jacobs.
Such a deal could further consolidate Jacobs’ hold on the business of environmental remediation for the U.S. Department of Energy, following its December 2017 purchase of CH2M.
Fluor, the Irving, Texas-based global engineering, procurement, and construction provider, declined to comment.
“Fluor Corporation does not provide public information in response to market rumors,” Fluor said in an email statement Sunday. “As a publicly-traded company, Fluor is always reviewing potential business opportunities to provide better value for our external stakeholders, clients and employees and would publicly communicate any potential material decisions and news at that time.”
Jacobs did not respond to queries regarding its rumored interest in Fluor.
Fluor does business with clients on six continents. It brought in $19.2 billion of revenue in 2018 and has more than 53,000 employees worldwide in a half-dozen markets including government services.
The industry talk is fueled in part by rough financial times at Fluor, which contributed to the May exit of CEO David Seaton after eight years at the helm and 34 years with the company. He was replaced by longtime executive Carlos Hernandez.
Fluor in May reported $4.2 billion in first-quarter revenue, compared to $4.8 billion during the first three months of 2018. Fluor experienced a net loss of $58 million, or $0.42 per diluted share, compared to a net loss of $18 million, or $0.13 per diluted share, a year ago.
Perhaps more troubling is the longer-term erosion in Fluor’s stock price, which stood at around $31.60 per share heading into Monday trading, down from about $39 at the time of Seaton’s departure and more than $48 per share a year ago.
Fluor does enjoy a large footprint in the DOE weapons complex, including as lead partner in the operations and management team at the Savannah River Site in South Carolina. It is also a partner in cleanup of the Portsmouth Site in Ohio and an integrated subcontractor to the venture that manages the Los Alamos National Laboratory in New Mexico.
As owner of CH2M, Jacobs leads environmental cleanup for the Central Plateau of DOE’s Hanford Site in Washington state. It is also a partner in management of the Nevada National Security Site.
