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Acquisition and Divestiture | 12 Months Ended
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Oct. 03, 2025
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract] |
Acquisition and Divestiture | Acquisition and Divestiture Acquisition of CMS On September 27, 2024, Amentum Parent Holdings LLC completed its merger with CMS, a leading provider of mission-critical, technology-driven services in government and commercial markets, in a Reverse Morris Trust transaction. Amentum Parent Holdings LLC was the accounting acquirer of CMS. Immediately following the Transaction, the Company had approximately 243 million issued and outstanding shares of common stock, of which Jacobs and its shareholders (“CMS Shareholders”) owned 58.5% of the issued and outstanding shares of common stock, and Amentum Joint Venture LP, our previous parent company (“AJVLP” and “Amentum Equityholder”) owns 37.0%. Subsequently, Amentum Equityholder distributed its shares of our common stock to certain parties (collectively, “Sponsor Stockholder”). Further, 4.5% of the issued and outstanding shares of common stock was placed in escrow at the merger date, to be released and delivered in the future to CMS Shareholders or to Amentum Equityholder, depending on the achievement of certain fiscal year 2024 targets by CMS (“Additional Merger Consideration”). In March 2025, the Company and Jacobs finalized the Additional Merger Consideration and released all 4.5% of the issued and outstanding shares of common stock out of escrow with 3.5% of the issued and outstanding shares released to CMS Shareholders and the remaining 1.0% of issued and outstanding shares to the Sponsor Stockholder. Additionally, in connection and in accordance with the terms of the Transaction, prior to the spin-off and Transaction, CMS provided a cash payment to Jacobs of approximately $911 million, after adjustments based on the levels of cash, debt and working capital in CMS. Under the acquisition method of accounting, the total final consideration exchanged for the CMS transaction is shown below and increased $7 million from September 27, 2024:
(In millions, except per share amounts) |  |
Shares of Amentum Holdings, Inc. common stock issued to CMS shareholders |  | 142 |
Per share price of Amentum Holdings, Inc. common stock |  | 25.67 |
Fair value of common stock issued to CMS shareholders (1) |  | 3,654 |
Fair value of additional equity consideration issued to CMS shareholders (2) |  | 218 |
Final working capital settlement (3) |  | 70 |
Other consideration (4) |  | 6 |
Fair value of consideration transferred |  | 3,948 |
Fair value of previously held equity interest (5) |  | 84 |
Total consideration |  | $ | 4,032 |
(1) Represents the fair value of equity consideration received by CMS shareholders to provide 58.5% ownership in the Company. (2) Represents the additional equity consideration which was finalized in March 2025. The balance reflects a decrease in equity consideration issued to CMS Shareholders following a resolution to release an additional 1.0% of the issued and outstanding shares of Amentum common stock back to Sponsor Stockholder. This balance is presented at fair value based on the acquisition-date share price and is included in the total purchase consideration in accordance with ASC 805. (3) Reflects a $70 million cash payment made based on the final net working capital position. This payment was made in the third quarter of fiscal year 2025 and included in the total purchase consideration in accordance with ASC 805, as it represents an obligation attributable to pre-acquisition activities. (4) Represents other immaterial adjustments, including a) estimated equity consideration related to pre-combination stock-based compensation awards, b) the settlement of CMS transaction costs paid by Amentum, and c) the removal of consideration related to the acquisition of non-controlling interests. (5) Prior to the Transaction, we held a non-controlling interest in a joint venture of 50% which was accounted for under the equity method of accounting, with the remaining 40% held by CMS and 10% held by an unrelated third party. As a result of the Transaction, the Company gained a controlling financial interest in the joint venture and it became a consolidated joint venture of the Company. This joint venture acquisition was accounted for as a business combination achieved in stages. Our pre-existing equity method investment in the joint venture was remeasured at an acquisition date fair value of $170 million by using a discounted cash flow model based on estimated future revenues, margins and discount rates, among other variables and estimates. The Company’s previously held equity interest in the joint venture was remeasured to fair value, resulting in a gain of $69 million recognized in the year ended September 27, 2024, which is included in gain on acquisition of controlling interest in our consolidated statements of operations. Additionally, as of the acquisition date, the Company had a payable from the joint venture with a fair value of $1 million that was settled in connection with the acquisition. The Company recognized $79 million of transaction costs for the year ended September 27, 2024, of which $31 million relates to debt issuance costs that were incurred immediately following the transaction and are expensed and presented in loss on extinguishment of debt in the consolidated statements of operations. The remaining $48 million of transaction costs are presented within selling, general, and administrative expenses in the consolidated statements of operations. The Transaction was accounted for as a business combination. The Company assessed the fair value of the identifiable intangible assets including customer relationships and backlog, which were valued using the excess earnings method of the income approach. This method requires several judgments and assumptions to determine the fair value of the intangible assets including expected future cash flows, weighted-average cost of capital, discount rates, useful lives of assets and expected long-term growth rates. The purchase price has been allocated to the tangible and intangible assets acquired and liabilities assumed based on their fair values as of the acquisition date, with the excess purchase consideration recorded as goodwill. The preliminary fair value estimates and assumptions to measure the assets acquired and liabilities assumed were subject to change as the Company obtained additional information during the measurement period. The Company finalized the allocation of the purchase price for the Transaction based on its understanding of the estimated fair value of the acquired assets and assumed liabilities as of the acquisition date, with the excess purchase consideration recorded as goodwill. The goodwill recognized was attributable to the synergies expected to be achieved by combining the businesses of Amentum and CMS, expected future contracts and the acquired workforce. Of the value attributed to goodwill and intangible assets, $737 million is deductible for income tax purposes. The Company completed the accounting for the merger during the fiscal year ended October 3, 2025. The final allocation of the purchase price is as follows:
(Amounts in millions) |  | Preliminary Allocation of Purchase Price |  | Measurement Period Adjustments, Net |  | Final Allocation of Purchase Price
Cash and cash equivalents |  | $ | 488 |  |  | $ | — |  |  | $ | 488 |
Accounts receivable |  | 1,043 |  |  | (64) |  |  | 979 |
Prepaid expenses and other current assets |  | 82 |  |  | (34) |  |  | 48 |
Property and equipment |  | 72 |  |  | (3) |  |  | 69 |
Equity method investments |  | 17 |  |  | 50 |  |  | 67 |
Goodwill |  | 2,665 |  |  | 339 |  |  | 3,004 |
Intangible assets |  | 1,860 |  |  | (55) |  |  | 1,805 |
Other long-term assets |  | 107 |  |  | 37 |  |  | 144 |
Current portion of long-term debt |  | (8) |  |  | — |  |  | (8) |
Accounts payable |  | (257) |  |  | (3) |  |  | (260) |
Accrued compensation and benefits |  | (285) |  |  | 22 |  |  | (263) |
Contract liabilities |  | (48) |  |  | (49) |  |  | (97) |
Other current liabilities |  | (98) |  |  | (190) |  |  | (288) |
Long-term debt, net of current portion |  | (1,122) |  |  | — |  |  | (1,122) |
Deferred tax liabilities |  | (353) |  |  | 61 |  |  | (292) |
Other long-term liabilities |  | (75) |  |  | (40) |  |  | (115) |
Non-controlling interests |  | (63) |  |  | (64) |  |  | (127) |
Total consideration |  | $ | 4,025 |  |  | $ | 7 |  |  | $ | 4,032 |
The fair value of acquired backlog of $275 million was amortized on an accelerated basis over approximately 1 year and the fair value of customer relationship intangible assets of $1,530 million is amortized on an accelerated basis over approximately 14 years. The fair value attributed to these intangible assets acquired was based on assumptions and other information compiled by management, including independent valuations that utilized established valuation techniques, and thus represents a Level 3 fair value measurement. The income approach was primarily used to value the intangible assets, consisting primarily of acquired program and contract intangibles and backlog. The income approach indicates value for an asset based on the present value of cash flow projected to be generated by the asset. Projected cash flow is discounted at a rate of return that reflects the relative risk of achieving the cash flow and the time value of money. Unaudited Pro Forma Combined Financial Information The following unaudited pro forma combined financial information presents the combined results of operations for CMS and the Company for the pre-acquisition periods of the twelve months ended September 27, 2024 and September 29, 2023, respectively:
|  | For the years ended
(Amounts in millions) |  | September 27, 2024 |  | September 29, 2023
Revenues |  | $ | 13,858 |  |  | $ | 13,371 |
Net income (loss) attributable to common shareholders |  | 145 |  |  | (170) |
The unaudited pro forma combined financial information presented above has been prepared from historical financial statements that have been adjusted to give effect to the Transaction as though it had occurred on October 1, 2022. The unaudited pro forma combined financial information includes adjustments for intangible asset amortization, stock-based compensation, interest expense, policy adjustments, and other transaction costs. The unaudited pro forma combined financial information is not intended to reflect the actual results of operations that would have occurred if the acquisition had occurred on October 1, 2022 nor is it indicative of future operating results. Divestiture of Rapid Solutions On June 26, 2025, we completed the sale of a hardware and product business, Rapid Solutions, to Lockheed Martin Corporation for a purchase price of $360 million in cash.

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