Jacobs, a Dallas-based design and engineering consulting firm, has acquired a controlling stake in PA Consulting, a London-based global innovation and transformation consultancy.
Jacobs’ 65% stake in PA Consulting’s private equity will see The Carlyle Group exit its stake in the UK consulting firm.
Carlyle in 2015 acquired a 51% stake in PA, which puts it at a value of $ 1 billion. Over the next five years, PA would experience rapid growth through organic and inorganic additions, including seven acquisitions. The M&A campaign included a significant expansion into the United States, where the company purchased product design and innovation consultancies Essential Design, 4iNNO, Astro Studios and Cooper Perkins.
During the Carlyle ownership, PA has seen its EBITDA more than double and has experienced compound annual revenue growth of 12% since 2016. PA is now valued at $ 2.432 billion.
Jacobs’ investment will take the form of a 65% interest through preferred and common stock, with PA employee turnover constituting a 35% interest. Jacobs will also provide debt financing to PA with an $ 845 million term loan and a revolving credit facility of up to $ 130 million to fund future growth.
Jacobs will finance the acquisition with available cash and existing and additional credit facilities. The transaction is expected to close by the end of the company’s second quarter of fiscal 2021.
The acquisition will allow PA to continue to capitalize on the last five years of growth through geographic expansion and additional acquisitions, particularly in the United States. The London-based company has 3,200 consultants, designers, innovators and scientists in offices in Europe and the United States.
“We see Jacobs as the ideal partner for PA because of its reputation as a market leader, alignment with our respective ambition, and the opportunities to better serve customers through access to the global platform and Jacobs’ customer base, positioning us for the next phase of growth, ”said Ken Toombs, who was named global CEO of PA in October. “We look forward to continuing to provide ingenious solutions to our customers, supported by the investment and complementary capability of Jacobs. “
Jacobs is one of the world’s largest engineering, design and construction services companies, alongside its competitors Aecom, SNC-Lavalin and WSP. Expanding its consultancy capabilities will follow the broader trend of its peers to focus on higher margin consultancy work instead of riskier fixed cost construction contracts.
Jacobs has approximately 55,000 employees and $ 14 billion in annual revenues.
Steve Demetriou, President and CEO of Jacobs, said: “We are excited about this partnership and the opportunity together to set a new industry benchmark for technology-driven solutions that generate value for our customers, employees and customers. investors – and changing the shape of our industry. We look forward to working together to execute PA’s ambitious growth plans and strengthen its reputation as a leading provider of end-to-end innovation capabilities.