3rd UPDATE: URS Corp Agrees GBP161M Scott Wilson Takeover

28th Jun 2010 14:26

(Updates, rewriting and adding detail.) By Jason Douglas Of DOW JONES NEWSWIRES LONDON (Dow Jones)--U.S. engineering consultant URS Corp. (URS) Monday said it agreed to buy smaller U.K. peer Scott Wilson Group PLC (SWG.LN) for GBP161 million, in a deal which bolsters its presence in the U.K. and gives it footholds in new markets overseas. But the deal, which has the backing of both companies' boards, may yet be trumped by Denver, Colorado-based engineering services firm CH2M HILL Cos. Ltd., which said it is also considering a cash offer for Scott Wilson. San Francisco-based URS, a provider of engineering and construction services, said it offered to acquire Scott Wilson for 210 pence a share, valuing it at GBP161 million. URS Chairman and Chief Executive Martin Koffel told Dow Jones Newswires the acquisition will give URS a much bigger presence in the U.K., where the two companies' combined services and expertise will put it in a better position to win work on major infrastructure projects like new railways, roads, airports and ports. URS is taking a long-term view on the U.K. market, said Koffel. The U.K.'s coalition government has signaled it wants the country to be a more attractive place for businesses and that requires modern infrastructure, he said. However, spending cuts and project delays are expected in the short term as the government grapples with the public finances. The acquisition of Scott Wilson would also help URS expand overseas, Koffel said. The company has offices in China, India, Poland and the Middle East, he said. The acquisition, if it goes ahead, would add to URS' earnings in fiscal 2011, Koffel said. Scott Wilson's board recommended shareholders accept the deal, which represents a 76% premium to Friday's closing price. However, CH2M HILL Cos. Ltd. said it is considering a possible offer for Scott Wilson of its own after conducting due diligence on the company. It didn't give terms and said there's no certainty a firm offer will be made. Broker Panmure Gordon said there's a good chance the deal with URS will go through. Under the terms of the recommended offer between URS and Scott Wilson, URS has the right to match any competing offer, said Koffel. At 1309 GMT, shares in Scott Wilson were 103.75 pence or 87% higher at 223.25 pence, suggesting that investors expect either URS of CH2M HILL will have to pay more than 210 pence a share to acquire the company. Separately Monday, Scott Wilson reported a 73% increase in fiscal-year net profit to GBP13.3 million. Revenue, including its share of joint ventures, fell to GBP340 million from GBP360 million due to weaker activity in the U.K. construction market. Earnings were flattered by costs a year earlier that weren't repeated, including layoffs and a lost contract. -By Jason Douglas, Dow Jones Newswires; 44-20-7842-9272; [email protected] (END) Dow Jones Newswires June 28, 2010 09:26 ET (13:26 GMT)