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Aecom Technology gets debt commitment for purchase of URS
By Sara Rosenberg
New York, July 14 – Aecom Technology Corp. received a commitment for senior secured credit facilities to help fund its acquisition of URS Corp., company officials said in a conference call on Monday.
However, a portion of that commitment is expected to be replaced with senior unsecured notes, officials said.
The total cost of debt is anticipated to be around 4.3%.
Bank of America is the lead bank on the financing.
Proceeds from the debt will be used to refinance some existing debt at Aecom and URS and fund the cash consideration of the acquisition.
At closing, Aecom expects to have about $5.2 billion in total debt outstanding.
Debt to EBIDTA will be a little over 4 times, but the company hopes to use almost all of its free cash flow to reduce debt with the goal being about 2 times debt to EBITDA by the end of 2017, officials added in the call.
The acquisition is valued at about $6 billion, including the assumption of URS debt.
Under the agreement, URS stockholders will receive per share consideration equal to $33.00 in cash and 0.734 shares of Aecom common stock. URS stockholders may elect to receive all cash or all stock consideration, and the election will be subject to a customary proration mechanism to achieve an aggregate consideration mix of about 59% cash and 41% Aecom common shares.
URS stockholders will own shares that account for about 35% of the combined company.
Closing is expected in October, subject to approvals from both companies’ stockholders, regulatory approvals and customary conditions. The transaction is not conditioned on financing.
Aecom is a Los Angeles-based engineering design firm. URS is a San Francisco-based provider of engineering, construction and technical services.
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