JACOBS ENGINEERING GROUP INC. (NYSE:JEC) Files An 8-K Entry into a Material Definitive AgreementItem 1.01 Entry into a Material Definitive Agreement
On August1, 2017, in connection with the execution of the Merger Agreement, AP VIII CH2 Holdings, L.P. (the “Stockholder”), entered into a Voting and Support Agreement with Jacobs (the “Voting Agreement”), to which the Stockholder, who owns 50% of the issued and outstanding CH2M Preferred Stock, which is convertible into approximately 18% of the issued and outstanding shares of CH2M Common Stock as of the date hereof, has agreed to, among other things, vote all of its shares of CH2M Preferred Stock in favor of the adoption of the Merger Agreement and against any competing transaction. The Voting Agreement will terminate upon the earlier of (i)the conclusion of the CH2M special stockholders’ meeting and (ii)the termination of the Merger Agreement in accordance with its terms.
The foregoing description of the Voting Agreement does not purport to be complete and is qualified in its entirety by reference to the Voting Agreement, a copy which is filed hereto as Exhibit 2.2 and is incorporated herein by reference.
The Stockholder also approved CH2M’s entry into the Merger Agreement in accordance with the requirements of the Certificate of Designation of the Series A Preferred Stock of CH2M.
Commitment Letters
In connection with entering into the Merger Agreement, Jacobs entered into a commitment letter, dated August1, 2017 (the “Term Loan Commitment Letter”), with BNP Paribas, BNP Paribas Securities Corp. and The Bank of Nova Scotia (such financial institutions being referred to collectively as the “Term Loan Commitment Parties”), to which the Term Loan Commitment Parties have committed (the “Term Loan Facility Commitment”) to provide a three-year senior unsecured delayed-draw term loan facility in an aggregate principal amount of $1.2 billion (the “Term Loan Facility”), the proceeds of which will be used to finance a portion of the Cash Consideration and related transactions and to pay related fees and expenses. The Term Loan Facility Commitment Letter contains conditions to funding of the Term Loan Facility customary for commitments of this type.
Jacobs currently intends to obtain certain consents from the lenders party to its existing revolving credit agreement in connection with the Merger (the “Revolver Consents”). Jacobs has entered into a commitment letter, dated August1, 2017 (the “Revolver Backstop Commitment Letter,” together with the Term Loan Facility Commitment Letter, the “Commitment Letters”), with BNP Paribas, BNP Paribas Securities Corp. and The Bank of Nova Scotia (such financial institutions being referred to collectively as the “Backstop Commitment Parties”) in order to backstop its existing revolving credit facility in the event that Jacobs is not able to obtain the Revolver Consents. Subject to certain terms and conditions, the Revolving Backstop Commitment Letter requires the Backstop Commitment Parties to provide a senior unsecured revolving credit facility in an aggregate principal amount of $1.6 billion (the “Revolver Backstop Facility”) to backstop Jacobs’ existing revolving credit agreement in the event that the Revolver Consents are not obtained. Subject to certain exceptions, the Revolver Backstop Facility will have terms substantially consistent with Jacobs’ existing revolving credit facility, including as to maturity and interest rate. In the event the Revolver Consents are not obtained and Jacobs enters into the Revolver Backstop Facility, borrowings thereunder will be used (i)to prepay all outstanding borrowings under Jacobs’ existing revolving credit agreement, (ii)to finance a portion of the Cash Consideration and related transactions and to pay related fees and expenses and (iii)for other general corporate purposes. The Revolver Backstop Commitment Letter contains certain conditions to funding of the Revolver Backstop Facility customary for commitments of this type.
The foregoing descriptions of the Term Loan Commitment Letter and the Revolver Backstop Commitment Letter do not purport to be complete and are qualified in their entirety by reference to the full text of the Term Loan Commitment Letter and the Revolver Backstop Commitment Letter, which are attached as Exhibits 10.1 and 10.2 to this Form 8-K and incorporated herein by reference.
Item 1.01 Other Events
On August2, 2017, Jacobs and CH2M issued a joint press release announcing, among other things, the entry into the Merger Agreement. The text of the press release is attached as Exhibit 99.1 and is incorporated herein by reference.
Item 1.01 Financial Statements and Exhibits.
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EXHIBIT NUMBER |
EXHIBIT DESCRIPTION |
| 2.1 | Agreement and Plan of Merger, dated August1, 2017 by and among Jacobs Engineering Group Inc., CH2M HILL Companies, Ltd. and Basketball Merger Sub Inc. |
| 2.2 | Voting and Support Agreement, dated August1, 2017 by and among Jacobs Engineering Group Inc., Basketball Merger Sub Inc. and AP VIII CH2 Holdings, L.P. |
| 10.1 | Term Loan Commitment Letter, dated August1, 2017, by and among Jacobs Engineering Group Inc., BNP Paribas, BNP Paribas Securities Corp. and The Bank of Nova Scotia |
| 10.2 | Revolver Backstop Commitment Letter, dated August1, 2017, by and among Jacobs Engineering Group Inc., BNP Paribas, BNP Paribas Securities Corp. and The Bank of Nova Scotia |
| 99.1 | Joint Press Release, dated August2, 2017. |
Additional Information and Where to Find It
In connection with the proposed acquisition of CH2M by Jacobs to the terms of an Agreement and Plan of Merger by and among CH2M, Jacobs and Basketball Merger Sub Inc., a wholly owned subsidiary of Jacobs (“Merger Sub”), Jacobs intends to file with the Securities and Exchange Commission (the “SEC”) a Registration Statement on Form S-4 (the “Form S-4”) that will contain a proxy statement of CH2M and a prospectus of Jacobs, which proxy statement/prospectus will be mailed or otherwise disseminated to CH2M’s stockholders when it becomes available. BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, INVESTORS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS (INCLUDING ALL AMENDMENTS AND SUPPLEMENTS) BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT JACOBS, CH2M AND THE MERGER. Investors may obtain free copies of the proxy statement/prospectus when it becomes available, as well as other filings containing information about Jacobs and CH2M, without charge, at the SEC’s Internet website (http://www.sec.gov). Copies of these documents may also be obtained for free from the companies’ websites at www.jacobs.com or www.ch2m.com
Participants in Solicitation
Jacobs, CH2M and their respective officers and directors may be deemed to be participants in the solicitation of proxies from the stockholders of CH2M in connection with the proposed Merger of Merger Sub with and into CH2M. Information about Jacobs’ executive officers and directors is set forth in its Annual Report on Form 10-K, which was filed with the SEC on November22, 2016 and its proxy statement for its 2017 annual meeting of stockholders, which was filed with the SEC on December9, 2016. Information about CH2M’s executive officers and directors is set forth in its Annual Report on Form 10-K, which was filed with the SEC on March7, 2017, and the proxy statements for its 2017 annual meeting of stockholders, which was filed with the SEC on April24, 2017. Investors may obtain more detailed information regarding the direct and indirect interests of Jacobs, CH2M and their respective executive officers and directors in the acquisition by reading the preliminary and definitive proxy statement/prospectus regarding the proposed transaction when it is filed with the SEC. When available, you may obtain free copies of these documents as described in the preceding paragraph.
No Offer or Solicitation
This document relates to a proposed business combination between Jacobs and CH2M. This document is for informational purposes only and shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction. This document is not a substitute for the prospectus or any other document that Jacobs or CH2M may file with the SEC in connection with the proposed transaction. No offering of securities shall be made, except by means of a prospectus meeting the requirements of Section10 of the Securities Act of 1933, as amended.
Cautionary Statement Regarding Forward-Looking Statements
Certain statements contained in this document constitute forward-looking statements as such term is defined in Section27A of the Securities Act of 1933, as amended, and Section21E of the Securities Exchange Act of 1934, as amended, and such statements are intended to be covered by the safe harbor provided by the same. Statements made in this document that are not based on historical fact are forward-looking statements, including statements regarding whether and when the proposed transaction
with CH2M will be consummated, the anticipated benefits thereof and Jacobs’ preliminary results for the third fiscal quarter of 2017. Although such statements are based on management’s current estimates and expectations, and currently available competitive, financial, and economic data, forward-looking statements are inherently uncertain, and you should not place undue reliance on such statements as actual results may differ materially. Jacobs cautions the reader that there are a variety of risks, uncertainties and other factors that could cause actual results to differ materially from what is contained, projected or implied by Jacobs’ forward-looking statements. The potential risks and uncertainties include, among others, the possibility that CH2M may be unable to obtain required stockholder approval or that other conditions to closing the transaction may not be satisfied, such that the transaction will not close or that the closing may be delayed; general economic conditions; the transaction may involve unexpected costs, liabilities or delays; risks that the transaction disrupts current plans and operations of the parties to the transaction; the ability to recognize the benefits of the transaction; the amount of the costs, fees, expenses and charges related to the transaction and the actual terms of any financings that will be obtained for the transaction; the outcome of any legal proceedings related to the transaction; the occurrence of any event, change or other circumstances that could give rise to the termination of the transaction agreement and the completion of Jacobs’ financial closing procedures, final adjustments and other developments that may arise between the date of this Current Report on Form 8-K and the time the financial results for Jacobs’ third fiscal quarter of 2017 are finalized. For a description of some additional factors that may occur that could cause actual results to differ from Jacobs’ forward-looking statements see Jacobs’ Annual Report on Form 10-K for the period ended September30, 2016, and in particular the discussions contained under Item1— Business; Item1A—Risk Factors; Item3— Legal Proceedings; and Item7— Management’s Discussion and Analysis of Financial Condition and Results of Operations, as well as Jacobs’ other filings with the Securities and Exchange Commission. Neither Jacobs nor CH2M is under any duty to update any of the forward-looking statements after the date of this Current Report on Form 8-K to conform to actual results, except as required by applicable law.
JACOBS ENGINEERING GROUP INC /DE/ ExhibitEX-2.1 2 d429733dex21.htm EX-2.1 EX-2.1 Exhibit 2.1 EXECUTION VERSION AGREEMENT AND PLAN OF MERGER among JACOBS ENGINEERING GROUP INC.,…To view the full exhibit click here
About JACOBS ENGINEERING GROUP INC. (NYSE:JEC)
Jacobs Engineering Group Inc. is a technical professional services company. The Company provides a range of technical, professional and construction services to industrial, commercial and governmental clients. The Company’s services include Project Services; Process, Scientific, and Systems Consulting Services; Construction Services, and Operations and Maintenance Services. It operates four lines of business (LOBs): Petroleum and Chemicals; Buildings and Infrastructure; Aerospace and Technology, and Industrial. It caters its services to various sectors, such as oil and gas exploration, production and refining; chemicals and polymers; programs for various national governments, including aerospace, defense, and environmental programs; buildings; infrastructure and telecommunications; mining and minerals; pharmaceuticals and biotechnology; power; pulp and paper; technology and manufacturing, and food and consumer products.