Colorado-based engineering giant CH2M could soon be bought by its Texas rival.
The global engineering firm, based in Englewood, is in “advanced talks” with Jacobs Engineering Group, according to a report in The London Times. Officials for CH2M could not comment on the report Friday.
“We do not comment on rumors or speculation,” wrote Lorrie Paul Crum, CH2M’s vice president of corporate communications.
Acquisition of the mostly employee-owned CH2M could come at a lower price tag than the company’s executives want, according to the Times’ report, which quotes only an “industry source.” The asking price could be about $1.5 billion – low for a company with revenues of about $5 billion – due to project liabilities overseas, the Times reported.
CH2M lost a contract to oversee the second phase of the High Speed Two rail project, a major construction project in Britain. The firm is also facing controversy surrounding pension liabilities stemming from its 2011 entry into the British market when it bought Halcrow.
Baird Equity Research said in a report that CH2M would fit with Jacobs strategically but predicted that acquiring the company would bring too much risk to Jacobs.
The Times reported that executives for Jacobs, based in Dallas, are looking to enter the United Kingdom market, and CH2M could give them a leg up in that process. The Colorado firm recently signed a deal to oversee the refurbishment of the Palace of Westminster and previously directed the construction of several sports venues for the 2012 Olympics in London.
CH2M has a long history in Colorado. Formerly CH2M Hill, the firm was founded in 1946 and became one of Denver’s biggest international players. In 2011, it was the largest privately held company in Colorado. The company was contracted to help clean up Rocky Flats in 1995 and helped to expand the Panama Canal in 2016. In 2003, Fortune Magazine named it one of the 100 Best Companies to Work For.
Former CH2M CEO Ralph Peterson brought the company to the international stage during his tenure from 1991 to 2009. Peterson, who died months after retiring in 2009, was a well-known figure in Denver. Gov. John Hickenlooper called him a mentor and picked Peterson to serve on his transition team to Denver mayor in 2003.
CH2M’s current CEO, Jacqueline Hinman, is one of the only women to run a major U.S. engineering firm. She is one of the 4 percent of women who head a Fortune 500 company.
CH2M did $5.2 billion in revenue in 2016, down from $6.1 billion in 2012, according to SEC filings. Its net income was $15 million last year. The company employed 20,000 employees worldwide in 2016, a decrease from 30,000 in 2012.
Jacobs Engineering Group primarily focuses on the oil and gas, petrochemical and pharmaceutical markets.
