Texas firm may be in talks to buy CH2M

Ja­cobs En­gi­neer­ing has sought out the Colorado-based group for its ties over­seas, mainly in Bri­tain.

The Denver Post - - BUSINESS - By Erin Dou­glas

Colorado-based en­gi­neer­ing gi­ant CH2M could soon be bought by its Texas ri­val.

The global en­gi­neer­ing firm, based in En­gle­wood, is in “ad­vanced talks” with Ja­cobs En­gi­neer­ing Group, ac­cord­ing to a re­port in The Lon­don Times. Of­fi­cials for CH2M could not com­ment on the re­port Fri­day.

“We do not com­ment on ru­mors or spec­u­la­tion,” wrote Lor­rie Paul Crum, CH2M’s vice pres­i­dent of cor­po­rate communications.

Ac­qui­si­tion of the mostly em­ploy­ee­owned CH2M could come at a lower price tag than the com­pany’s ex­ec­u­tives want, ac­cord­ing to The Times’ re­port, which quotes only an “in­dus­try source.” The ask­ing price could be about $1.5 bil­lion — low for a com­pany with rev­enues of about $5 bil­lion — due to pro­ject li­a­bil­i­ties over­seas, The Times re­ported.

CH2M lost a con­tract to over­see the sec­ond phase of the High Speed Two rail pro­ject, a ma­jor con­struc­tion pro­ject in Bri­tain. The firm is also fac­ing con­tro­versy sur­round­ing pen­sion li­a­bil­i­ties stem­ming from its 2011 en­try into the Bri­tish mar­ket when it bought Hal­crow.

Baird Eq­uity Re­search said in a re­port that CH2M would fit with Ja­cobs strate­gi­cally but pre­dicted that ac­quir­ing the com­pany would bring too much risk to Ja­cobs.

The Times re­ported that ex­ec­u­tives for Ja­cobs, based in Dal­las, are look­ing to en­ter the United Kingdom mar­ket, and CH2M

could give them a leg up in that process. The Colorado firm re­cently signed a deal to over­see the re­fur­bish­ment of the Palace of West­min­ster and pre­vi­ously di­rected the con­struc­tion of sev­eral sports venues for the 2012 Olympics in Lon­don.

CH2M has a long his­tory in Colorado. For­merly CH2M Hill, the firm was founded in 1946 and be­came one of Den­ver’s big­gest in- ter­na­tional play­ers. In 2011, it was the largest pri­vately held com­pany in Colorado. The com­pany was con­tracted to help clean up Rocky Flats in 1995 and helped to ex­pand the Panama Canal in 2016. In 2003, For­tune Mag­a­zine named it one of the 100 Best Com­pa­nies to Work For.

For­mer CH2M CEO Ralph Peter­son brought the com­pany to the in­ter­na­tional stage dur­ing his ten­ure from 1991 to 2009. Peter­son, who died months af­ter re­tir­ing in 2009, was a well-known fig­ure in Den­ver. Gov. John Hick­en­looper called him a men­tor and picked Peter­son to serve on his tran­si­tion team to Den­ver mayor in 2003.

CH2M’s cur­rent CEO, Jacque­line Hin­man, is one of the only women to run a ma­jor U.S. en­gi­neer­ing firm. She is one of the 4 per­cent of women who head a For­tune 500 com­pany.

CH2M did $5.2 bil­lion in rev­enue in 2016, down from $6.1 bil­lion in 2012, ac­cord­ing to SEC fil­ings. Its net in­come was $15 mil­lion last year. The com­pany em­ployed 20,000 em­ploy­ees world­wide in 2016, a de­crease from 30,000 in 2012.

Ja­cobs En­gi­neer­ing Group pri­mar­ily fo­cuses on the oil and gas, petro­chem­i­cal and phar­ma­ceu­ti­cal mar­kets.

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