US giants in the mix to take over SKM
According to a report in the Australian Financial Review, US giants Jacobs Engineering and SAIC are contenders to acquire, or merge with, Australia’s Sinclair Knight Merz (SKM).
SKM has grown fast in recent years, with employee numbers rising from just over 600 a decade ago to almost 8,000 now; revenues reached $1.1bn in 2011.
However, ambitious expansion plans for Asia, Latin America and Africa have led the company’s chief executive Santo Rizzuto to explore a transformative corporate transaction.
According to the AFR, the firm and its adviser, Greenhill Caliburn, are “in close negotiations with three US parties”.
Jacobs Engineering Group, based in Pasadena California, had revenues in 2011 of over US$10bn.
The firm has 200 offices in 25 countries with expertise across a wide range of industries including mining and metals, aerospace, automotive, chemicals, energy, infrastructure and refining.
Founded in 1947 by Joseph J Jacobs, the firm is traded on the New York Stock Exchange and has grown rapidly in recent years by acquisition.
For example, in 2008 it acquired LES Engineering in the UK, and in 2011 bought the 4,500 person strong process and construction business of Aker Solutions, which boosted its growth in South America and China.
Science Applications International Corporation (SAIC), headquartered in Virginia in the US, has 40,000 employees and annual revenues of over US$11bn.
The firm was founded in 1969 by J Robert Beyster and operates in markets like energy environment and infrastructure, health, cybersecurity and logistics.
The AFR also suggested that other possible acquirers of SKM included AMEC of the UK, KBR of the US and Technip of France.
However, Australia’s largest listed engineering services group, WorleyParsons is no longer in the frame.