Dallas-based professional services giant Jacobs will spin-off and combine its Critical Mission Solutions and Cyber & Intelligence government services businesses with Virginia-based Amentum, a global engineering and technology solutions provider, creating a new, publicly traded player in the government services sector.
We told you in May that Jacobs intended to separate its Critical Missions Solutions (CMS) business to create two separate companies. The company said the spin-off announcement comes after a comprehensive review of all alternatives, including inbound inquiries resulting from that initial announcement. No financial details were announced.
“By separating CMS and associated Cyber & Intelligence Solutions, Jacobs will streamline our business portfolio and transform into a more focused, higher-margin company more closely aligned with key global mega trends,” Jacobs CEO Bob Pragada said in a statement. “We believe this transaction is in the best interests of the company and our stakeholders, gaining the benefits of a tax efficient transaction, plus even greater value with significant cash proceeds and future realization of synergies.”
“I’m confident the CMS and Cyber & Intelligence Solutions teams are poised for continued success in their new chapter as part of a more focused, independent public company that will be a leading player in the critical mission government services space,” Pragada added, “with both breadth and depth of capabilities across a more diversified portfolio.”
Move creates a new business with nearly $13 billion in annual revenue
Jacobs said the move creates a robust government technology solutions business with nearly $13 billion in annual revenue, consisting of Jacobs’ Critical Mission Solutions, the Cyber & Intelligence portions of its Divergent Solutions (DVS) business, and Amentum.
Jacobs’ Cyber & Intelligence Solutions, which share significant strategic and operational synergies with CMS, generated $807 million in revenue—approximately 85% of DVS’s revenues—in fiscal year 2023, Jacobs said. The company said it will retain its innovative, next-generation data solutions and digital technologies business, which is part of its DVS segment and core to delivering digitally enabled critical infrastructure solutions to clients.
Key milestone in boosting value
“Uniting our great organizations—Amentum, CMS, and Cyber & Intelligence Solutions—creates a leading provider of systems integration and technology solutions with the talent, scope, scale and footprint to deliver excellence and a wider range of solutions for our clients,” Amentum CEO John Heller said in a statement. “Our combined company will deliver extensive expertise in the government’s highest priority areas of energy, space exploration, intelligence and analytics, and digital modernization. We look forward to the union of our strong teams and a bright future ahead.”
Jacobs said this is an important milestone in becoming a more focused and higher value company.
Post-separation, Jacobs said it will continue to be a premier technology-enabled solutions provider focused on addressing the world’s most complex critical infrastructure and sustainability challenges with leading positions in the attractive water and environment, energy transition, transportation and advanced manufacturing sectors.
Excluding the businesses being separated, Jacobs said it generated roughly $10.9 billion in revenue in fiscal year 2023.
After the deal is done, Jacobs Executive Chair Steve Demetriou will become executive chair of the combined company. Heller will serve as CEO of the combined company and sit on the combined company’s board. Dr. Steve Arnette, EVP and president of CMS will serve as the COO.
“Over the last eight years, our focus has been to drive a cultural and business transformation to position Jacobs as a technology-enabled solutions provider and one of the world’s most innovative companies,” Demetriou said in a statement. “I look forward to working alongside John, Steve and the board to help bring that same dedicated focus to successfully launch this new public company and deliver significant value-added opportunities for clients, shareholders and employees.”
The board of directors of the combined company will initially be composed of an equal number of directors appointed by Jacobs and Amentum. Senior management team of the combined company will be drawn from both companies and will be announced at a later date.
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R E A D N E X T
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Jacobs is one of the world's largest professional services and engineering firms. "By separating CMS, we will streamline our business portfolio and transform Jacobs into a higher-growth, higher-margin company more closely aligned with key global mega trends and growth sectors," CEO Bob Pragada said.
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