ConDig (02-Aug-17).  Global engineering firm Jacobs Engineering Group Inc is to snap up rival CH2M Hill Cos Ltd in a $3.27 billion cash-and-stock deal aimed at expanding its presence in the government services and infrastructure sectors.

Dallas, Texas-based Jacobs said that the deal also involves purchasing about $416 million of CH2M net debt.

Englewood, Colorado-based CH2M Hill, which is a leader in the infrastructure and government service sectors, including water, transportation, environmental and nuclear, had trailing twelve month revenue of $4.4 billion and has 20,000 employees.

Jacobs said that it has previously targeted these sectors for growth and linking up CH2M Hill is expected to more than double Jacobs’ revenue from its buildings and infrastructure division.

“By increasing our industry reach and adding to our already extensive skills, this transaction enhances our value to our clients and bolsters Jacobs’ position as a premier consulting, design, engineering, construction, and operations and maintenance technical services firm,” said Steve Demetriou, Jacobs’ chairman and chief executive officer.

Jacobs said it expects about $150 million in cost savings by the end of the second year following the close of the transaction.

The savings are set to come from real estate, optimization of corporate operations, alignment of organizational structures and  procurement and IT systems. Jacobs said it expects to incur about $225 million in one-time costs to achieve these savings.