Francisco-based URS Corp is acquiring Washington Group
International for $2.6 billion, valuing the transaction
at $80 per share, a 14 per cent premium over Washington
Group''s closing stock price on Friday.
deal combines two of the nation''s largest engineering
and construction firms..
boards of directors of both companies unanimously
approved the deal, which will fetch Washington Group
stockholders to $43.80 in cash and .772 shares of
URS stock for each Washington Group share.
has a history of anticipating change in the industry,
and this transaction is the next logical step in building
for future growth," URS chief executive Martin
Koffel said in a statement.
has 29,500 employees in 20 countries, while Washington
Group has 25,000 employees worldwide. The combined
company would operate under the name URS Corp., and
would have one of the largest teams of nuclear scientists
and engineers in the industry and a backlog of projects
exceeding $11 billion in more than 50 countries, company
will remain CEO of the combined company, and one member
of the Washington Group board of directors will serve
on the combined company''s board.
will "have a significant presence in the anticipated
resurgence of the nuclear industry, including fuel
sourcing, enrichment, power generation and spent fuel
reprocessing and disposition," Washington Group
CEO Stephen Hanks said.
Group International, once named Morrison Knudsen Corp.,
helped build Hoover Dam and the San Francisco Bay
Bridge. It earned nearly $81 million on more than
$3.4 billion in revenue during the 2006 fiscal year.
May 2001, it emerged from its second bankruptcy filing
in six years after it bought Raytheon Engineers and
Constructors, the power unit of defence and aircraft
giant Raytheon Co.
purchase gave Washington Group a strong foothold in
the power and defence market, but it came with hidden
costs. Of more than 300 contracts acquired in the
purchase, a dozen cost much more to complete than
Raytheon had disclosed to Washington Group. Raytheon
estimated its costs at less than $800 million, while
Washington Group later pegged them at $3 billion.
Group sued Raytheon, but the two later settled without
any cash changing hands or either company admitting
any wrongdoing. Eventually, Raytheon was required
to pay $2.5 billion to complete the projects because
of previous guarantees to project owners.
Washington Group shareholders also sued Raytheon for
their losses. Raytheon settled that lawsuit in 2005
for $39 million without admitting any wrongdoing.
URS projects have included a renovation of the Pentagon
and an expansion of the San Francisco International
Airport. URS has a history of acquiring other companies:
In 1995, it bought fellow design engineering firm
Greiner Engineering Inc., a deal that Koffel said
made it one of the top 20 design and construction
management firms in the country at the time.