AECOM Technology Corp. made an official statement yesterday, revealing that it reached an agreement over the acquisition of URS Corp. in a $4-billion deal. The companys move is driven by its desire to expand reach gain new services in markets including gas and oil.
The President and Chief Executive Officer of AECOM Technology Corp. – Mr. Michael Burke said on a conference call, which was cited by Bloomberg: “Together we will be one of the largest companies in the engineering and construction industry.” Mr. Burke also explained that the deal is a “transformational” one for both companies and is to provide the company the ability to reach “more clients in more industry end markets” as reported by the Financial Times.
Under the terms of the cash-and-stock transaction, AECOM Technology Corp. is to pay the equivalent of 56.31 dollars per share for URS Corp. This price is about 8.2% more than the closing price of URS on July 11th. The deal between the companies is expected to create a new leader in the industry worldwide that is to dominate on the market.
Currently, both AECOM and URS offer engineering and construction services to a variety of companies in different sectors. The deal will not only be beneficial for both companies, but is also expected to turn AECOM into the biggest publicly traded company that is based in Los Angeles. The deal is also to put an end to a difficult period of URS, whose shares have fallen sharply over the last few months.
The combined company will be put under the lead of the current Chief Executive Officer of AECOM – Mr. Michael Burke – after the deal is sealed. AECOM Technology Corp. is the biggest engineering design company by revenue in the world, and URS is the worlds third-largest engineering design company. After the transaction is finalized, the merger is to create a company that will be greatly larger than the current number two in the top three of worlds engineering design companies – the Australian WorleyParsons Ltd.
AECOM Technology Corp. was 0.32% up to close at 31.76 dollars per share on Friday, marking a one-year change of -2.31%. According to the information published on the CNN Money, the 7 analysts offering 12-month price forecasts for AECOM Technology Corp. have a median target of 35.00, with a high estimate of 35.00 and a low estimate of 30.00. The median estimate represents a +10.20% increase from the last price of 31.76.
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