Scott Wilson Group recommends URS acquisition

SAN FRANCISCO — URS Corporation and Scott Wilson Group plc., the U.K.-based integrated design and infrastructure engineering consultancy, announced the terms of a recommended offer for URS to acquire Scott Wilson. The proposed acquisition, which has been unanimously recommended by the board of Scott Wilson, will significantly expand URS’ infrastructure capabilities in the U.K. across a range of long-term growth markets, including rail and transit, transportation infrastructure, and ports and harbors. The proposed acquisition also will enhance URS’ worldwide capabilities outside of the U.K. Upon completion of the transaction, URS will have an expanded global presence to support the extensive global client base of the combined group.

Scott Wilson has more than 5,500 employees and a network of 80 offices around the world, including offices in key regional centers such as London, Hong Kong, New Delhi, Warsaw, and Dubai. In the company’s 2010 fiscal year, which ended on May 2, 2010, Scott Wilson had revenues of approximately £340 million ($510 million) and net income of £13.6 million ($20.4 million). Approximately 72 percent of the company’s fiscal 2010 revenues came from the U.K. and Ireland, with the balance originating in Asia Pacific (12 percent), Europe (9 percent), Middle East (4 percent) and India (3 percent). The company’s order book was £244 million ($366 million) at the end of its 2010 fiscal year.

Martin M. Koffel, chairman and CEO of URS, said, “The proposed acquisition of Scott Wilson is a compelling transaction for URS and an important step forward in our strategy to expand our capabilities in the U.K. infrastructure market and in other key regions around the world. Upon completion of this transaction, we expect URS would be among the top ten U.K. engineering firms by revenue, with the added scale and expertise to perform some of the largest and most complex infrastructure assignments in the country. Outside of the U.K., Scott Wilson’s offices in Warsaw, Hong Kong, New Delhi, and Dubai provide a strong complement to URS’ locations in Frankfurt, Paris, Madrid, Milan, Shanghai, Sydney, and Toronto, further expanding our geographic footprint and ability to support public and private sector clients worldwide.”

Koffel continued: “Scott Wilson’s market sectors are also well aligned with URS’ existing focus. In addition to its strong infrastructure practice, Scott Wilson is well positioned in the environment and natural resources sectors, including the nuclear power market, which is a key area of strength for URS.”

Geoff French, chairman of Scott Wilson, said, “In an increasingly global marketplace, the board believes that a combination with URS will significantly enhance Scott Wilson’s business opportunities and represents a compelling proposition for our shareholders, clients, and employees. This offer reflects the underlying value of Scott Wilson’s business and provides our shareholders with an opportunity to realize that value in cash today. In addition, as part of an enlarged and global group, our employees will be able to participate in larger and more complex projects, as well as benefit from further investment in new areas of expertise. We are extremely excited about our future with URS and look forward to providing our clients with access to an enlarged global footprint and an ability to service their needs across a wider range of services and sectors.”

Transaction Terms
Under the terms of the agreement, shareholders of Scott Wilson will receive 210 pence ($3.20) in cash for each Scott Wilson share, which values the entire issued and to be issued share capital at approximately £161 million ($242 million).

H. Thomas Hicks, CFO of URS, said, “Scott Wilson brings a history of profitability and strong recent cash flow generation, a team of highly talented professionals, a solid order book, and an excellent position in attractive markets. In particular, the company is benefiting from its substantial international businesses outside the U.K. and Ireland, and its strong position in the U.K. and European road and high-speed rail markets. As part of URS, we see increased opportunities to leverage the combined company’s client base, capabilities, and geographic reach.”

The transaction is structured as a court-sanctioned Scheme of Arrangement under the laws of the U.K. and is subject to the approval of Scott Wilson’s shareholders, court approval in the U.K., and regulatory approvals in various jurisdictions. URS expects that the transaction will close in the third quarter of 2010 and will be accretive to earnings per share in fiscal year 2011 on a GAAP basis. Due to the anticipated timing of the closing, URS expects that the transaction will not have a significant impact on its fiscal year 2010 results. The transaction is not conditional on financing.

Upon completion of the transaction, it is intended that Hugh Blackwood, group chief executive of Scott Wilson, will join URS’ management committee and will oversee from London the combined international operations for U.K./Ireland, Europe, Middle East, India, and China. It is also intended that other members of Scott Wilson’s executive management team will have roles with URS. These will be finalized following closure of the transaction.

For more information, visit www.urscorp.com or www.scottwilson.com.