Starboard, in a letter here to the company's chief executive officer and board, said AECOM should closely evaluate a sale of its construction services segment. With over 13,000 employees in 25 countries, Construction Services partners with visionary owners and developers around the globe. The transaction is currently expected to be completed in the second … On January 28, 2019, AECOM completed the spin-off of its private infrastructure investment arm, AVAIO Capital, which concentrated primarily on mid and late-stage projects in North America and Western Europe across four sectors: transportation, water, low-carbon energy and digital infrastructure.
Starboard Value reckoned that the sale of the CS unit which exhibited earnings volatility would simplify the portfolio. The letter stated that AECOM was built through a series of acquisitions that have not been effectively integrated and the company’s various segments lag its peers on different operating metrics. The impending sale at an 11.6x multiple of 2019 adjusted EBITDA represents significant premium to AECOM’s valuation. Starboard said it believed in addition to exploring an outright sale, Aecom could also offload its construction services business. From buildings and civil construction to energy and industrial solutions, AECOM Construction Services is built to modernize, expand and deliver the most iconic and complex structures ever conceived.
With over 13,000 employees in 25 countries, Construction Services partners with visionary owners and developers around the globe. This divestiture would accelerate ACM’s objective of shareholder value creation through debt reduction and share repurchase.Cancelled Spin-Off Details, Acquistion Details and Top 5 ShareholdersThe company intends to use the transaction proceeds for reducing debt substantially and repurchasing stocks. Moreover, the investment management fi rm also opined that a thorough evaluation of alternatives would be necessary, including an outright sale of the MS segment, despite the additional tax burden, compared to the more risky spin-off option.Earlier, on June 17, 2019, AECOM had announced that its Board of Directors had approved a plan to spin-off the Management Services (MS) segment into a standalone government services company.
The remaining professional services business is expected to generate high returns on capital and consistently strong free cash flow.On June 20, 2019, investment management firm Starboard Value LP (4% stake in ACM) wrote a letter to Chairman and CEO Michael S. Burke, urging the company to explore sale of the Construction Services (CS) segment. According to management, the deal was part of the ongoing transformation, with various strategic initiatives already under way such as exit hard-bid-at-risk construction exposure, G&A reduction, divestiture of Production Services unit and exiting some countries to improve return on capital.Photographer: Andrew Harrer/BloombergFor FY19, AECOM expects adjusted EBITDA of $940 million and adjusted EPS of $2.75, which approximates at the mid-point of prior guidance range. Diversification is important AECOM's breaks its business down into three segments: design and consulting services (around 45% of revenue), construction services (a … LOS ANGELES--(BUSINESS WIRE)--Jun. “We are extremely pleased with today’s transformative and value-enhancing announcement, which significantly accelerates our planned debt reduction and commitment to repurchase stock,” Michael Burke, AECOM’s chairman and chief executive officer, said in a statement.In fiscal 2018, the management services segment generated revenue of $3.7 billion, with operating income of $200 million and adjusted operating income of $239 million.Jeff Smith, chief executive officer of Starboard Value LP, speaks during a Bloomberg Television interview on Feb. 5, 2019. Goldman Sachs Group Inc. and DBO Partners are financial advisers to Aecom on the deal while Wachtell, Lipton, Rosen & Katz are providing legal counsel. As an independent company, Amentum, a premier global technical and engineering services partner supporting critical programs of national significance across defense, security, intelligence, energy, […] Get this delivered to your inbox, and more info about our products and services.Got a confidential news tip?
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