Aecom Technology enters $3.11 billion term loans with URS acquisition

By Jennifer Chiou

New York, Oct. 17 – Aecom Technology Corp. entered into a new credit agreement with the completion of the acquisition of URS Corp., according to an 8-K filing with the Securities and Exchange Commission.

The credit agreement consists of a $1,925,000,000 term loan A facility, a $1,187,500,000 seven-year covenant-light term loan B, a $1.05 billion revolving credit facility and a $500 million incremental performance letter of credit facility.

Bank of America Merrill Lynch, MUFG Union Bank, Scotia Bank, BNP Paribas Securities Corp. and J.P. Morgan Securities LLC are the joint lead arrangers.

In September, the term loan B had previously been reduced from $1,262,500,000, while the term loan A was increased from $1.85 billion.

As previously reported, the term loan B is priced at Libor plus 300 basis points with a 0.75% Libor floor and an original issue discount of 99˝ and includes 101 soft call protection for one year.

Earlier in syndication, pricing on the B loan was lowered from Libor plus 325 bps, the call protection was extended from six months and the 18-month MFN sunset was eliminated.

Borrowings under the term loan A and revolver will bear interest at Libor plus 175 bps to 275 bps.

Proceeds from the loans and $1.6 billion of senior notes were used to fund the cash consideration of the acquisition of URS and to refinance some existing debt at Aecom and URS.

Under the agreement, URS stockholders received per-share consideration equal to $33.00 in cash and 0.734 of a share of Aecom common stock. URS stockholders could elect to receive all cash or all stock consideration, and the election was subject to a customary proration mechanism to achieve an aggregate consideration mix of about 59% cash and 41% Aecom common shares.

When announced, the acquisition was valued at about $6 billion, including the assumption of URS debt. The roughly $2.3 billion cash component of the acquisition consideration was funded from about $1.6 billion from a notes offering and $700 million under the credit agreement.

In other news, Aecom’s board was increased to 13 directors from 11 with the merger. Also, Jane Chmielinski, chief operating officer and president of Americas of Aecom, will retire on April 1.

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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