Jacobs (J) to Separate Critical Mission Solutions Business

Jacobs Solutions Inc. (NYSE: J) today announced that its Board of Directors has unanimously approved a plan to separate its Critical Mission Solutions (CMS) business from Jacobs, creating two independent companies, each positioned for greater success.

"Today's announcement is a significant milestone in our long record of taking bold actions to drive value creation," said Jacobs' CEO Bob Pragada. "By separating CMS, we will streamline our business portfolio and transform Jacobs into a higher-growth, higher-margin company more closely aligned with key global mega trends and growth sectors. For the CMS business, the benefits from the separation are equally compelling. CMS has grown to be an industry leading government services provider with significant scale, differentiated services and deep client relationships. As an independent company, CMS will be better able to focus on its distinct strategy and operating needs, driving further momentum in its business. We believe the separation will create value for all stakeholders."

Benefits of the Separation Transaction

As separate companies, Jacobs and the CMS business are expected to benefit from:

Two Leading Companies

Jacobs: Following the separation, Jacobs will continue to be a premier technology-enabled solutions provider focused on addressing the world's most complex critical infrastructure and advanced manufacturing challenges. The streamlined portfolio will combine leading global capabilities in consulting, planning, engineering, design and program management with data science and technology-enabled expertise to deliver differentiated end-to-end solutions for primarily state, local and national governments and private sector clients throughout the world. The Company's leading positions in the attractive water and environment, energy transition, transportation and advanced manufacturing sectors are each closely aligned with the Company's three growth accelerators – Climate Response, Consulting and Advisory, and Data Solutions. Excluding the businesses to be separated, Jacobs generated approximately $10.5 billion in revenue in fiscal year 2022.

Critical Mission Solutions (CMS): CMS, which generated approximately $4.4 billion in revenue in fiscal year 2022, is a leading provider of technical consulting, applied science research, training, intelligent asset management and program management services to federal government agencies. CMS delivers mission-critical technology-enabled solutions aligned to space, national security, nuclear remediation and 5G technology. CMS's business benefits from a strong base of recurring, long-term enterprise contracts, where CMS's distinctive capabilities and deep client relationships provide a competitive advantage.

Steve Arnette, EVP and President of CMS, will continue to lead CMS.

Separation Details

Jacobs is committed to maintaining an investment grade profile for Jacobs following the separation. The proposed capital structure, governance and other matters relating to CMS are still being determined and will be communicated at a later date.

Jacobs is targeting completing the separation in the second half of fiscal year 2024 through a distribution that is intended to be tax-free to Jacobs shareholders for U.S. federal income tax purposes. Completion of the separation transaction is subject to final approval by Jacobs' Board of Directors and other customary conditions, including the receipt of a private letter ruling from the Internal Revenue Service, opinions from tax advisors and the filing and effectiveness of a registration statement with the U.S. Securities and Exchange Commission. Jacobs intends to provide updates on the separation as appropriate.

Fiscal Q2 2023 Earnings Results and Investor Conference Call

Jacobs will discuss the planned separation of the CMS business and its fiscal second quarter 2023 financial results, which were separately announced today, on a conference call/webcast scheduled today at 10:00 A.M. EDT, which it is webcasting live at https://invest.jacobs.com.

Advisors

Centerview Partners LLC and Perella Weinberg Partners LP are serving as financial advisors to Jacobs and Wachtell, Lipton, Rosen & Katz is serving as legal advisor.

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