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Other Business Combinations | 12 Months Ended
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Oct. 01, 2021
Business Combinations [Abstract] |
Other Business Combinations | Other Business Combinations On November 19, 2021, Jacobs consummated its previously announced acquisition of BlackLynx ("BlackLynx"). Pursuant to and subject to the terms and conditions of Agreement and Plan of Merger (the “Merger Agreement”), Jacobs acquired all of BlackLynx's outstanding shares of common stock, in a transaction valued at up to $257.5 million, on a cash-free, debt-free basis, including base consideration of $250 million, and a potential earn-out payment of up to $7.5 million. The amount of any earnout payment will depend on BlackLynx achieving certain revenue and gross margin thresholds in calendar year 2022. The purchase price was paid in cash and is subject to customary post-closing adjustments. Buffalo Group On November 24, 2020, a subsidiary of Jacobs completed the acquisition of Buffalo Group, a leader in advanced cyber and intelligence solutions which allows Jacobs to further expand its cyber and intelligence solutions offerings to government clients. The Company paid total consideration o f $190.1 million, which was comprised of approximately $182.4 million in cash to the former owners of Buffalo Group and contingent consideration of $7.7 million which was expected to be settled in fiscal 2022. Subsequent to the closing date and during the current fiscal year, the Company recognized the $7.7 million as an offset to selling, general and administrative expense as it was no longer expected to be paid. In conjunction with the acquisition, the Company assumed the Buffalo Group's debt of approximately $7.7 million. The Company repaid all of the assumed Buffalo Group debt by the end of the first fiscal quarter of 2021. The following summarizes the fair values of The Buffalo Group's assets acquired and liabilities assumed as of the acquisition date (in millions):
Assets |
Cash and cash equivalents | $ | 8.4 |
Receivables | 19.2 |
Property, equipment and improvements, net | 2.3 |
Goodwill | 130.7 |
Identifiable intangible assets | 74.0 |
Prepaid expenses and other current assets | 6.2 |
Total Assets | $ | 240.8 |
Liabilities |
Accounts payable, accrued expenses and other current liabilities | $ | 46.9 |
Other long term liabilities | 3.8 |
Total Liabilities | 50.7
Net assets acquired | $ | 190.1 |
The purchase price allocation is based upon preliminary information and is subject to change when additional information is obtained. Goodwill recognized results from a substantial assembled workforce, which does not qualify for separate recognition, as well as expected future synergies from combining operations. All of the goodwill recognized is expected to be deductible for tax purposes, given the acquisition was structured as an asset acquisition. The Company has not completed its final assessment of the fair values of Buffalo Group's assets acquired and liabilities assumed. The final purchase price allocation could result in adjustments to certain assets and liabilities, including the residual amount allocated to goodwill. Identifiable intangibles are customer relationships, contracts and backlog and have estimated lives of 9 years. Fair value measurements relating to the Buffalo Group are made primarily using Level 3 inputs including discounted cash flow and Monte Carlo simulation techniques. Fair value for the identified intangible assets is estimated using inputs primarily for the income approach using the multiple period excess earnings method. The significant assumptions used in estimating fair value include (i) revenue projections of the business, including profitability, (ii) attrition rate and (iii) the estimated discount rate that reflects the level of risk associated with receiving future cash flows. Other personal property assets, such as furniture, fixtures and equipment, are valued using the cost approach, which is based on replacement or reproduction costs of the asset less depreciation. The fair value of the contingent consideration was estimated using a Monte Carlo simulation and the significant assumptions used include projections of revenues for Buffalo Group through calendar 2021 and probabilities of meeting those projections. No summarized unaudited pro forma results are provided for the Buffalo Group due to the immateriality of this acquisition relative to the Company's consolidated financial position and results of operations. John Wood Group's Nuclear Business On March 6, 2020, a subsidiary of Jacobs completed the acquisition of the nuclear consulting, remediation and program management business of John Wood Group, a U.K.-based energy services company, for an enterprise value of £246 million, or approximately $317.9 million, less cash acquired of $24.3 million, as updated for additional working capital adjustments. The John Wood Group nuclear business allows Jacobs to further expand its lifecycle nuclear services business. The following summarizes the fair values of John Wood Group's assets acquired and liabilities assumed as of the acquisition date (in millions):
Assets |
Cash and cash equivalents | $ | 24.3 |
Receivables | 74.2 |
Other current assets | 3.8 |
Property, equipment and improvements, net | 8.3 |
Goodwill | 207.8 |
Identifiable intangible assets | 80.0 |
Miscellaneous | 19.4 |
Total Assets | $ | 417.8 |
Liabilities |
Accounts payable, accrued expenses and other current liabilities | $ | 71.4 |
Long term liabilities | 28.5 |
Total Liabilities | 99.9
Net assets acquired | $ | 317.9 |
Goodwill recognized results from a substantial assembled workforce, which does not qualify for separate recognition, as well as expected future synergies from combining operations. None of the goodwill recognized is expected to be deductible for tax purposes. The Company has completed its final assessment of the fair values of John Wood Group's assets acquired and liabilities assumed. Since the initial preliminary estimates reported in the second quarter of fiscal 2020, the Company has updated certain amounts reflected in the final purchase price allocation, as summarized in the fair values of John Wood Group's nuclear business assets acquired and liabilities assumed as of the acquisition date set forth above. Identified intangibles include customer relationships, contracts and backlog and developed technology. The customer relationships, contracts and backlog intangible represents the fair value of existing contracts, underlying customer relationships and backlog. The customer relationships, contracts and backlog intangible and the developed technology intangible have lives of 12 and 15 years, respectively. Fair value measurements relating to the John Wood Group nuclear business are made primarily using Level 3 inputs including discounted cash flow techniques. Fair value is estimated using inputs primarily for the income approach, which include the use of both the multiple period excess earnings method and the relief from royalties method. The significant assumptions used in estimating fair value include (i) revenue projections of the business, including profitability, (ii) attrition rate and (iii) the estimated discount rate that reflects the level of risk associated with receiving future cash flows. Other personal property assets, such as furniture, fixtures and equipment, are valued using the cost approach, which is based on replacement or reproduction costs of the asset less depreciation. No summarized unaudited pro forma results are provided for the John Wood Group nuclear business due to the immateriality of this acquisition relative to the Company's consolidated financial position and results of operations. KeyW On June 12, 2019, Jacobs completed the acquisition of The KeyW Holding Corporation (“KeyW”), a U.S. based national security solutions provider to the intelligence, cyber, and counterterrorism communities by acquiring 100% of the outstanding shares of KeyW common stock (the "KeyW acquisition"). The KeyW acquisition allows Jacobs to further expand its government services business. The Company paid total consideration of $902.6 million which was comprised of approximately $604.2 million in cash to the former stockholders and certain equity award holders of KeyW and the assumption of KeyW’s debt of $298.4 million. The Company repaid all of KeyW's debt by the end of the fourth fiscal quarter of 2019. The following summarizes the fair values of KeyW assets and acquired liabilities assumed as of the acquisition date (in millions):
Assets |
Cash and cash equivalents | $ | 29.1 |
Receivables | 79.1 |
Inventories, net | 19.3 |
Prepaid expenses and other | 2.4 |
Property, equipment and improvements, net | 24.5 |
Deferred tax asset and other | 37.8 |
Goodwill | 615.6 |
Identifiable intangible assets | 179.0 |
Total Assets | $ | 986.8 |
Liabilities |
Accounts payable | $ | 8.3 |
Accrued expenses | 69.1 |
Short term debt | 298.4 |
Other current liabilities | 3.9 |
Other non-current liabilities | 2.9 |
Total Liabilities | 382.6 |
Net assets acquired | $ | 604.2 |
Goodwill recognized results from a substantial assembled workforce, which does not qualify for separate recognition, as well as expected future synergies from combining operations. Goodwill of $136.3 million is expected to be deductible for tax purposes. The Company has completed its final assessment of the fair values of the acquired assets and liabilities of KeyW. Since the initial preliminary estimates reported in the third quarter of fiscal 2019, the Company has updated certain amounts reflected in the final purchase price allocation, as summarized in the fair values of KeyW assets acquired and liabilities assumed as of the acquisition date as set forth above. Identified intangibles include customer relationships, contracts and backlog and developed technology. The customer relationships, contracts and backlog intangible represents the fair value of existing contracts, underlying customer relationships and backlog. The customer relationships, contracts and backlog intangible, and the developed technology intangible have lives of 10 and 12 years, respectively. Other intangible liabilities consist of the fair value of office leases and have a weighted average life of approximately 9 years. Fair value measurements relating to the KeyW acquisition are made primarily using Level 3 inputs including discounted cash flow techniques. Fair value is estimated using inputs primarily for the income approach, which include the use of both the multiple period excess earnings method and the relief from royalties method. The significant assumptions used in estimating fair value include (i) revenue projections of the business, including profitability, (ii) attrition rate and (iii) the estimated discount rate that reflects the level of risk associated with receiving future cash flows. Other personal property assets, such as furniture, fixtures and equipment, are valued using the cost approach, which is based on replacement or reproduction costs of the asset less depreciation. For purposes of our comparative fiscal 2020 and 2019 reporting requirements in this Form 10-K, the following presents summarized unaudited pro forma operating results of the Company for the year ended September 27, 2019 assuming that the June 12, 2019 acquisition of KeyW had occurred at the beginning of fiscal 2018 for pro forma purposes. These pro forma operating results are presented for illustrative purposes only and are not indicative of the operating results that would have been achieved had the related events occurred on such date (in millions, except per share data):
|  | For the Year Ended
|  | September 27, 2019
Revenues |  | $ | 13,068.7 |
Net earnings of the Group from Continuing Operations |  | $ | 326.0 |
Net earnings (loss) attributable to Jacobs from continuing operations |  | $ | 303.0 |
Net earnings (loss) attributable to Jacobs from continuing operations per share: |  |
Basic earnings (loss) from continuing operations per share |  | $ | 2.19 |
Diluted earnings (loss) from continuing operations per share |  | $ | 2.17 |
Included in the table above are the unaudited pro forma operating results of continuing operations. Also, income tax expense (benefit) for the fiscal year pro forma period ended September 27, 2019 was $41.3 million. CH2M On December 15, 2017, the Company completed the acquisition of CH2M HILL Companies, Ltd. ("CH2M"), an international provider of engineering, construction and technical services, by acquiring 100% of the outstanding shares of CH2M common stock and preferred stock (the "CH2M acquisition"). The Company paid total consideration of approximately $1.8 billion in cash (excluding $315.2 million of cash acquired) and issued approximately $1.4 billion of Jacobs’ common stock, or 20.7 million shares, to the former stockholders and certain equity award holders of CH2M. The following summarizes the estimated fair values of CH2M assets acquired and liabilities assumed as of the acquisition date (in millions):
Assets |
Cash and cash equivalents | $ | 315.2 |
Receivables | 1,120.6 |
Prepaid expenses and other | 72.7 |
Property, equipment and improvements, net | 175.1 |
Goodwill | 3,165.5 |
Identifiable intangible assets: |
Customer relationships, contracts and backlog | 412.3 |
Lease intangible assets | 4.4 |
Total identifiable intangible assets | 416.7 |
Miscellaneous | 530.8 |
Total Assets | $ | 5,796.6 |
Liabilities |
Notes payable | $ | 2.2 |
Accounts payable | 309.6 |
Accrued liabilities | 787.4 |
Contract liabilities | 260.8 |
Identifiable intangible liabilities: |
Lease intangible liabilities | 9.6 |
Long-term debt | 706.0 |
Other deferred liabilities | 659.0 |
Total Liabilities | $ | 2,734.6 |
Noncontrolling interests | (37.3) |
Net assets acquired | $ | 3,024.7 |
Goodwill recognized results from a substantial assembled workforce, which does not qualify for separate recognition, as well as expected future synergies from combining operations. None of the goodwill recognized is expected to be deductible for tax purposes. During the first quarter of fiscal 2019, the Company completed its final assessment of the fair values of the acquired assets and liabilities of CH2M. Accrued liabilities and other deferred liabilities include approximately $404.7 million related to estimates for various legal and other pre-acquisition contingent liabilities accounted for under ASC 450. See Note 19- Contractual Guarantees, Litigation, Investigations and Insurance relating to CH2M contingencies.

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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