Terms of the deal call for Los Angeles-based Aecom to pay $56.31 in cash and stock for URS, a premium of 8% over the target's Friday close and 19% above its trailing 30-day average close. URS holders will receive $33 in cash and 0.734 shares of Aecom, and have the option to elect either all cash or all stock subject to conditions.
The deal values URS' equity at $4 billion, with Aecom also set to assume URS' debt. Post-deal URS holders will own about 35% of the combined company.
San Francisco-based URS is a provider of engineering and construction services for public agencies and the private sector, boasting more than 50,000 workers in 50 countries. Aecom said that the combination would create an engineering and construction giant with more than 95,000 workers in 150 countries, with pro forma Ebitda of $1.3 billion on more than $19 billion in sales, nearly twice that of industry rival WorleyParsons Ltd.
"This combination creates an industry leader with the ability to deliver more capabilities from a broad global platform to reach more clients in more industry end markets," Aecom CEO Michael S. Burke said in a statement.
The deal would make Aecom one of the largest companies in terms of revenue in the engineering and construction industry, and make it the largest publicly traded firm headquartered in Los Angeles. Post-deal Burke will remain as CEO, with Aecom executive chairman John Dionisio serving as board chair. Aecom said at closing it expects to elect two URS board members as new directors.