A deal that will combines leaders in engineering, construction and management services to create a huge diversified ‘Single Source’ E&C company has been struck between URS and Washington Group International (WGINT). They had combined 2006 revenues of $7.6 billion, more than 54,000 employees and both are well known in mining.
URS and Washington Group International have signed a definitive agreement for the acquisition of Washington Group by URS in a cash and stock transaction valued at approximately $2.6 billion. The transaction will expand the capabilities of both firms and capitalize on their positions in important high growth sectors, such as mining and environmental management.

That combined 2006 revenue of $7.6 billion, would have ranked the fourth highest among US publicly-traded engineering and construction companies. Based on previously issued guidance, the companies would have combined 2007 revenues of about $8.6 billion. In addition, the companies would have had combined 2006 EBITDA of $425 million and total backlog exceeding $11 billion, as of March 31, 2007. The combined company would have projects in over 50 countries.

The combined company will offer a full range of engineering, construction, operations and maintenance services for both fossil fuel and nuclear power plants globally. The combined company also will have one of the largest teams of nuclear scientists and engineers in the industry, as well as a leading nuclear decommissioning and remediation business, enabling it to meet the anticipated resurgence in the nuclear energy market. In the infrastructure market, the combined entity will be positioned to meet growing demand for comprehensive services on large, complex transportation and water/wastewater projects around the world. In addition, the combined company is expected to be a major contractor to the federal government, including a top five provider of technical services to the US Department of Defense and a top provider of engineering, management and environmental services to the US Department of Energy.

Martin M. Koffel, Chairman and Chief Executive Officer of URS, said, “URS has a history of anticipating change in the industry, and this transaction is the next logical step in building for future growth. Through this combination, both companies will be better positioned to capture growth from favorable trends across the engineering and construction sectors, including the increased investment in infrastructure projects, the focus on emissions reduction and energy independence in the power market, and the increased use of outsourcing by federal agencies, such as the US Departments of Defense and Energy. Together, we will have the resources to meet increasing client demand for a single firm that can provide the full range of engineering and construction services required for large, complex projects in these high growth markets, both in the US and abroad. In addition, our clients will benefit from the combined firm’s expanded capabilities in mining and [other] sectors.”