US swoop for PA shares values tech consultant at $2.4bn
Dallas company Jacobs Engineering, quoted on Wall Street, has agreed to buy a 65 per cent stake in technology innovator PA Consulting which values the Cambridge Cluster business at $2.4 billion.
PA’s global innovation and technology centre is based in Melbourn, where the company has had its roots for 45 years. It is planning major expansion globally, especially in the United States.
The transaction, which is expected to close by the end of calendar Q1 2021 subject to regulatory approvals and shareholder consent, sees current shareholder The Carlyle Group exit its stake in PA.
The continued share ownership by PA employees is a key feature of the Jacobs transaction.
PA has grown strongly during the five-year Carlyle investment period through a combination of organic and M & A-led growth (seven acquisitions) which has driven global expansion.
This has resulted in EBITDA more than doubling over the period of Carlyle’s investment and compound annual revenue growth of 12 per cent since 2016.
From its inception in 1943, PA has worked with a wide range of clients – from startups with a promising idea to change the world to some of the most important global companies and organisations – to find innovative ways to be faster and nimbler and to create the services and products that grow their businesses, delight their customers and serve citizens.
PA has developed world-leading innovations, for example with Virgin Hyperloop to reinvent transport, with Ori Biotech to revolutionise cell and gene therapy manufacturing, and with iPredict™, the world’s first AI and machine learning system, to predict failures in critical underground electricity distribution assets.
The new strategic partnership with Jacobs will enable PA to build on this success and accelerate its growth plan through geographic expansion, particularly in the US, and additional acquisitions.
The partnership will see PA further enhance its market-leading capabilities in innovation, design, digital and technology. The private equity style investment from Jacobs will allow PA to retain its independence, alongside current culture, brand and values.
John Alexander, chair of PA, said: “We have undertaken a thorough process to screen and select potential new external investors that align with PA’s culture, independence and ambition.
“Jacobs stood out during the selection process because of the close affinity between our respective values and their reputation as one of the leading global providers of technical and professional services to clients across the public and private sectors.
“We were hugely impressed with Jacobs’ commitment to a PE style investment to support our values and purpose and accelerate our growth trajectory.”
CEO Ken Toombs added: “We would like to thank Carlyle for the excellent partnership over five years. Together we have significantly grown the business and we are proud of what we have accomplished.
“We see Jacobs as the ideal partner for PA because of their market leading reputation, the alignment with our respective ambition and the opportunities to better serve clients through access to Jacobs’ global platform and client base, positioning us for the next phase of growth.
“Their purpose of creating a more connected, sustainable world and commitment to an inclusive future for all aligns with our own purpose – Bringing Ingenuity to Life – and our commitment to innovate towards a positive human future.”
With around $15 billion in revenue and a talent force of more than 55,000, Jacobs provides a full spectrum of professional services including consulting, technical, scientific and project delivery for the government and private sector.