Engineering consultant Jacobs Solutions Inc (J.N) is in advanced talks to merge its government consulting arm at a valuation of more than $4 billion with private equity-owned Amentum Services Inc, people familiar with the matter said on Thursday. The sources said the deal would result in a new publicly traded company that Jacobs’ shareholders would mostly own. They added that the deal is expected to close by the end of this year or early next year. The CMS business represents around 35% of Jacobs’ overall revenues. The segment provides cybersecurity, data analytics, and software application integration services and consulting in national security, 5G technology, and space exploration. Last year, it won a $3.2 billion contract to support NASA’s space endeavors, including the Artemis II lunar mission.
The planned merger will be structured as a reverse Morris Trust transaction, an efficient way to spin off a division not core to a more prominent firm’s strategy. It is also likely to be tax-free for Jacobs’ shareholders. The firm has been evaluating various options for the CMS platform, created in 2024 and generated around $10.5 billion of revenue last fiscal year.
The sources said that Veritas Capital LP and Platinum Equity LP compete with Amentum’s private equity owners, Lindsay Goldberg and American Securities, to acquire the business. They plan to offer all-cash offers for the unit, which is expected to be valued at a projected $5 billion. Amentum is a provider of technical and advisory services to civilian, defense, and intelligence clients in the aerospace, energy, and nuclear sectors, as well as commercial customers such as ExxonMobil (XOM.N) and Caterpillar CAT.N. It was formed in 2020 through the carve-out of engineering consultant Aecom (ACM.N).
Founded in 1964, Amentum has broad consulting, planning, engineering, architecture, scientific, and construction management capabilities in the mining and metals, water and environment, buildings and infrastructure, and power and energy industries. It operates in the United States, Australia, Asia, and South America.
A merger would strengthen the position of Jacobs’ new public entity, a top-10 global consultancy with a combined revenue of more than $10 billion. This would make it one of the world’s largest and most diverse technical professional and construction services providers, bringing together leading specialists in critical missions, infrastructure, aerospace, and nuclear. The move could also help the combined company gain a more significant foothold in the aerospace industry, high-growth 5G technology, and national security markets. It would also allow the companies to expand their presence in China and potentially benefit from a stronger dollar, which makes it harder for foreign-based competitors to raise prices. In addition, the combined company could boost its profitability by gaining economies of scale. The sources said this is a crucial factor driving the deal. They added that the merged company could generate a higher margin than the current Jacobs’.