WorleyParsons doubles revenues as Jacobs throws in cards on oil and gas

October 24, 2018

WorleyParsons announced on Monday, 22nd October 2018, its acquisition of the energy, chemicals and resources (ECR) segment of Jacobs, a Texas-based professional service company, for $3.3 billion. The acquisition will cause WorleyParsons to double in size and bring in additional revenues of about $1.3 billion dollars (as of Q3 2018 reporting). For comparison, WorleyParsons had average quarterly revenue of about $1.2 billion. The ECR business delivers front-end studies, engineering, procurement, maintenance and construction services across oil and gas upstream (20%), refining (25%), chemical markets (35%), mining & minerals (20%).

Jacobs is divesting to focus on less cyclical businesses where it holds a greater market share and better margins, e.g. aerospace, nuclear, environment and infrastructure. It is also an optimization of Jacobs’s portfolio after they acquired the $4.5 billion dollar business CH2M in August 2017. With that move, the company grew its core offerings by 40% but grew its ECR business by just 10%.

With the new acquisition, WorleyParsons further strengthens its hydrocarbons group with a 65% growth. This also increases the company’s exposure to minerals, metals and chemicals by seven-fold. On top of this, WorleyParsons will triple its footprint in the US as Jacobs’s ECR business has 70% exposure to the US, and the rest is international.

This acquisition overshadows WorleyParsons acquisition of UK engineering firm Amec Foster Wheeler last year for $215 million. WorleyParsons now needs to focus on unlocking the communicated $92 million synergies to improve the 5% margin from the business they acquired. WorleyParsons enjoyed a 9% margin in 2018, and the future looks bright as they have now become a dominant player in the oil and gas, and metals and mining industry.


###

Contacts

Audun Martinsen
Head of Oilfield Service Research
Mobile: +47 48 07 76 11
audun.martinsen@rystadenergy.com

Julia Weiss
SVP, Head of Marketing
Mobile: +47 48 29 87 61
julia.weiss@rystadenergy.com

About Rystad Energy

Rystad Energy is an independent energy research and business intelligence company providing data, tools, analytics and consultancy services to the global energy industry. 

Our products and services cover energy fundamentals and the global and regional upstream, oilfield services and renewable energy industries, tailored to analysts, managers and executives alike.