Jacobs has completed a transaction with PA Consulting through which it secured a 65 percent stake in the U.K.-based management consulting company. The investment placed an enterprise value of $2.5 billion to PA Consulting and the move is expected to drive Jacobs' growth strategy as a leading technology-enabled solutions provider, Jacobs reported on Wednesday. The remaining 35 percent stake is held by PA employees.
"This strategic partnership accelerates our strategy to become a leader in bringing greater innovation and creativity to respond to current-day challenges such as climate change, cyber, urbanization and the ongoing healthcare crisis," said Jacobs Chair and CEO Steve Demetriou.
The purchase was approved by PA employees and shareholders, with 99.9 percent voting in favor of the transaction. The partnership will expand Jacobs and PA employee offerings by delivering innovative solutions for clients.
"The completion of Jacobs' investment marks the beginning of an exciting new chapter for PA. Jacobs' culture, values and client base are closely aligned to our own, making them a natural marketplace partner,“ said Ken Toombs, CEO of PA Consulting.
The joint go-to-market teams are aimed at high growth sectors of health and life sciences, public services, consumer and manufacturing and defense and security to address critical missions.
“Their complementary capabilities will further strengthen our ability to deliver innovative solutions for our clients. The overwhelming support of PA shareholders for the transaction is a testament to the great potential we all see in this partnership," Toombs added.
Of the work PA Consulting has done, the company has advanced sustainability by developing solutions to replace single-use plastics, and has supported the transition to clean energy. PA Consulting has also supported infrastructure by developing proprietary digital technology to predict energy utility asset failures.
"We are excited about the leading-edge work that PA does, as well as their performance for 2020, which exceeded expectations. Their pipeline of strategic and technical consulting work continues to grow“¦ the Jacobs-PA partnership presents a compelling organic growth opportunity driven by technology-enabled solutions in response to industry disruption and client needs," said Jacobs President and COO Bob Pragada.
Jacobs completed the deal on Tuesday in accordance with the terms announced in November. The transaction was funded through a combination of cash on hand and existing debt facilities. Jacobs announced its agreement to purchase the majority stake in PA Consulting in the same month.