US private equity firms challenge Amentum in race for Jacobs unit -sources

Jacobs Solutions

04/10/2023 20:34

By David  Carnevali
       NEW YORK, Oct 4 (Reuters) - U.S. buyout firms Veritas
Capital and Platinum Equity are vying to acquire Jacobs
Solutions Inc's  J.N  government consulting business, competing
against rival contractor Amentum, according to people familiar
with the matter.
    Dallas-based Jacobs is seeking final offers this week for
the unit, which is known as Critical Mission Solutions (CMS),
and could be valued at more than $4 billion, the sources said. 
    Veritas and Platinum Equity plan to make all-cash offers,
while Amentum's private equity owners Lindsay Goldberg and
American Securities intend to offer Amentum shares as part of
their bid, the sources added.
    The sources, who asked not to be identified because details
of the sale process are confidential, cautioned that no deal is
certain. 
    Jacobs announced in May it was exploring a tax-free spin-off
to its shareholders of the CMS business, and it could choose to
proceed with these plans as an alternative to a sale, according
to the sources.
    Jacobs and Amentum declined to comment. Veritas and Platinum
Equity did not respond to requests for comment.
    Jacobs CEO Robert Pragada said on the company's latest
quarterly call in August that "multiple" suitors had expressed
interest in CMS. 
    The CMS platform provides cybersecurity, data analytics and
software application services and consulting to civilian,
defense and intelligence clients in industries including space,
national security, nuclear waste and 5G technology. 
    The business, which generated $4.4 billion in revenue in its
latest fiscal year, was awarded a $3.2 billion contract in
February to support several NASA programs, including the Artemis
II mission to the moon.
    Shedding CMS would leave Jacobs with its people and places
solutions division, which provides transportation and
environmental consulting to government entities and private
sector clients, and PA Consulting, a management consulting
business advising across several sectors. These operations
generated $10.5 billion in revenue in Jacobs' latest fiscal
year.

 (Reporting by David Carnevali in New York; Editing by Cynthia
Osterman)
 ((David.Carnevali@thomsonreuters.com;))