Jacobs (NYSE: J) has announced the successful completion of an equity for debt exchange, which has resulted in a significant reduction in the company's outstanding borrowings. By exchanging 19,464,174 shares of common stock of Amentum Holdings, Inc. for approximately £240 million aggregate principal amount of Jacobs Engineering Group Inc. (JEG) term loans, Jacobs has effectively reduced its debt by approximately £240 million, or the equivalent of approximately $312 million.
This move comes as part of Jacobs' business transformation strategy, aimed at delivering resilient, digitally enabled infrastructure solutions and reducing debt within the company's previously announced timeline. The exchange marks an important step in Jacobs' efforts to become an industry-leading science-based consulting and advisory company with a positive impact on the world.
Following the exchange, an additional 9,732,087 shares of Amentum common stock remain in escrow, subject to final determination of certain performance milestones in connection with a post-closing adjustment to the merger consideration provided in the transaction documents relating to the combination of Jacobs' critical mission solutions and cyber & intelligence businesses with Amentum Parent Holdings LLC on September 27, 2024.
As part of its future plans, Jacobs intends to distribute any additional shares of Amentum common stock to which it becomes entitled on a pro rata basis to Jacobs' shareholders as of a record date that will be set once the final determination is reached.
The transaction was facilitated by BofA Securities, J.P. Morgan, Morgan Stanley, BNP Paribas, and TD Cowen, who acted as joint book-running managers in the registered public offering of Amentum common stock.
Jacobs' Chairman and CEO, Bob Pragada, expressed satisfaction with the completion of the equity for debt exchange and emphasized the company's commitment to delivering value for its shareholders through debt reduction and strategic business transformation.
As of now, the company has reduced its outstanding borrowings significantly, and this move is expected to have a positive impact on Jacobs' financial position and future endeavors. Today the company's shares have moved -1.6% to a price of $119.73. Check out the company's full 8-K submission here.
