US private equity firms challenge Amentum in race for Jacobs unit -sources

By David Carnevali

NEW YORK (Reuters) – U.S. buyout firms Veritas Capital and Platinum Equity are vying to acquire Jacobs Solutions Inc’s government consulting business, competing against rival contractor Amentum, according to people familiar with the matter.

Dallas-based Jacobs is seeking final offers this week for the unit, which is known as Critical Mission Solutions (CMS), and could be valued at more than $4 billion, the sources said.

Veritas and Platinum Equity plan to make all-cash offers, while Amentum’s private equity owners Lindsay (NYSE:) Goldberg and American Securities intend to offer Amentum shares as part of their bid, the sources added.

The sources, who asked not to be identified because details of the sale process are confidential, cautioned that no deal is certain.

Jacobs announced in May it was exploring a tax-free spin-off to its shareholders of the CMS business, and it could choose to proceed with these plans as an alternative to a sale, according to the sources.

Jacobs and Amentum declined to comment. Veritas and Platinum Equity did not respond to requests for comment.

Jacobs CEO Robert Pragada said on the company’s latest quarterly call in August that “multiple” suitors had expressed interest in CMS.

The CMS platform provides cybersecurity, data analytics and software application services and consulting to civilian, defense and intelligence clients in industries including space, national security, nuclear waste and 5G technology.

The business, which generated $4.4 billion in revenue in its latest fiscal year, was awarded a $3.2 billion contract in February to support several NASA programs, including the Artemis II mission to the moon.

Shedding CMS would leave Jacobs with its people and places solutions division, which provides transportation and environmental consulting to government entities and private sector clients, and PA Consulting, a management consulting business advising across several sectors. These operations generated $10.5 billion in revenue in Jacobs’ latest fiscal year.