Sinclair Knight Merz (SKM) and Jacobs recently announced they have signed an agreement to merge their two businesses, with Jacobs to acquire SKM. The SKM Board of Directors believes that the merger proposal “is in the best interests of SKM Shareholders and unanimously recommends that SKM shareholders vote in favour of the proposal subject to an independent expert concluding that the merger proposal is in the best interests of SKM Shareholders and in the absence of a superior proposal.” Jacobs Engineering already took a major position in the mining EPCM business with the acquisition of Aker Solutions’ mining business in 2011; while SKM would add significant value in the feasibility, engineering and delivery of mining projects, with a particular strength in South America, where projects include the ongoing Continuous Mining EPCM for Codelco Andina, which will employ Caterpillar’s Rock Feeder and Rock Mover solutions.
The merger proposal is subject to the satisfaction of certain conditions, including court and SKM shareholder approval. The statement said that the merger proposal with Jacobs is “the culmination of a thorough process, including detailed interactions between the two companies to ensure a strong fit and alignment between the two organisations. It follows a detailed review by SKM of the strategic options available to SKM in order to best position the group to achieve its long-term vision and objectives.” SKM’s CEO and Managing Director, Santo Rizzuto, commented: “This is an exciting opportunity. It uniquely positions us amongst our global peers and opens the way for us to achieve even greater things in the future. It adds scale, diversification and growth opportunities to our business. We believe that this will significantly strengthen our market position and that this is an outstanding proposition for our clients and our people.”
Jacobs’ President, and CEO, Craig Martin, said that the combination is a unique fit that strongly delivers on the company’s strategic ambitions. “SKM’s culture, values, and operating philosophy are very compatible with ours, making our companies an excellent fit for one another. Our capabilities and geographies have little overlap, enabling us together to continue to expand our client relationships and provide significant opportunities for our employees. We are enthusiastic about the potential.”
In 2009, SKM articulated its long-term vision for the next decade and beyond in a dynamic and increasingly global business environment. SKM’s vision involved a broadening of its business across geographies, sectors and skills in order to improve its offering to its clients and provide greater opportunity for its people. SKM believes that the combination with Jacobs provides an opportunity to allow it to achieve its vision as part of a company that shares the same values and beliefs. Key benefits include a complementary geographic presence and skill base which is expected to enhance SKM’s offering to clients; new opportunities for employees as part of a global organisation with a broad range of practice areas and global clients; immediate and long-term growth opportunities through complementary geographies and capabilities; with the financial strength of the combined business providing “an enhanced ability to facilitate organic and acquisitive growth.”
The merger proposal will be implemented by way of two separate but inter-conditional Schemes of Arrangement between SKM and its shareholders, which (subject to court approval) will be voted on by SKM shareholders at meetings expected to be held in November/December 2013.