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Jacobs acquires 65% stake in PA Consulting at valuation of £1.8bn

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Ken Toombs, CEO of PA Consulting
Ken Toombs, CEO of PA Consulting

A major new restructuring process has taken place at PA Consulting, as global technical and professional services leader Jacobs has taken a 65 per cent stake in the Melbourn-based company.

The transaction values PA at £1.825bn and is expected to close by the end of the first quarter 2021 subject to regulatory approvals and shareholder consent. It sees current shareholder The Carlyle Group exit its stake in PA.

Carlyle invested in PA Consulting in December 2015 through Carlyle Europe Partners IV (CEP IV), a European-focused, upper-mid market buyout fund. At that point, Carlyle acquired a 51 per cent shareholding in an agreement that valued PA at $1bn.

PA has grown strongly during the five-year Carlyle investment period through a combination of organic and M&A-led growth (seven acquisitions) which has driven global expansion. This has resulted in EBITDA doubling over the period of Carlyle’s investment and compound annual revenue growth of 12 per cent since 2016.

The new strategic partnership with Jacobs will enable PA to accelerate its growth plan through geographic expansion, particularly in the US, and additional acquisitions. The partnership “will see PA further enhance its market-leading capabilities in innovation, design, digital and technology”. The private equity-style investment from Jacobs will allow PA to retain its independence, alongside current culture, brand and values. The continued share ownership by PA employees is a key feature of the deal.

John Alexander, chair of PA, said: “We have undertaken a thorough process to screen and select potential new external investors that align with PA’s culture, independence and ambition. Jacobs stood out during the selection process because of the close affinity between our respective values and their reputation as one of the leading global providers of technical and professional services to clients across the public and private sectors.

“We were hugely impressed with Jacobs’ commitment to a PE style investment to support our values and purpose and accelerate our growth trajectory.’’

Ken Toombs, CEO of PA Consulting, said: ‘’We would like to thank Carlyle for the excellent partnership over five years. Together we have significantly grown the business and we are proud of what we have accomplished.”

Jacobs’ chair and CEO, Steve Demetriou, said: ‘’We are excited by this partnership and the opportunity to set a new industry benchmark together for technically-driven solutions that drive value for our clients, employees and investors – and changing the shape of our industry.

“We look forward to working together to deliver PA’s ambitious growth plans and strengthening their reputation as the leading provider of end-to-end innovation capability.’’

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