Jacobs Solutions Inc. · NYSE:J
Jacobs Solutions — Merger or Acquisition (April 2019)
23 slides from Jacobs Solutions's merger presentation, Apr 22, 2019
Slide 1: Jacobs and KeyW
Jacobs and KeyW Providing Technology Enabled, Mission-Critical Solutions at the Forefront of National Security April 22, 2019
Slide 2: Agenda
Agenda Transaction Overview and Strategic Rationale Steve Demetriou, Chair & CEO Financial Overview Kevin Berryman, EVP & CFO Q&A 2
Slide 3: Forward-Looking Statement Disclaimer
Forward-Looking Statement Disclaimer Certain statements contained in this presentation constitute forward-looking statements as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and such statements are i
Slide 4: Transaction Overview and Strategic Rationale
Transaction Overview and Strategic Rationale Advancing our Profitable Growth Strategy Terry Hagen, Chief Operating Officer and President of Aerospace, Technology and Nuclear Financial Overview Kevin Berryman, EVP & CFO Wrap Up Steve Demetriou, Chair & CEO 4 Q&A
Slide 5: Jacobs + KeyW: Delivering Innovative Solutions for Critical Government Priorities
Jacobs + KeyW Delivering Innovative Solutions for Critical Government Priorities Industry-leading Differentiation • Adds Intelligence Surveillance and Reconnaissance (ISR), national security based cyber and mission-critical IT and analytics capabilities cybersecurity • IP-driven technology with uniq
Slide 6: Transaction Overview
Transaction Overview • $11.25 per share in cash or $603M equity value; Enterprise Value (EV) of $815 M1 Purchase Price • Represents an EV multiple of ~10x 2020 expected adj. PF EBITDA, assuming run-rate cost synergies • Expected net annual cost savings of $15 million by end of 2020 Synergies • Signi
Slide 7: KeyW at a Glance
KeyW at a Glance ~$520M $1.1B ~1,790 76% FY2019E Revenue Total Backlog Employees of employees have Top Secret Clearance or higher Revenue by Capability Revenue by Customer Type Revenue by Contract Type Revenue by Contract Position Mission IT FBI & Homeland Security Cyber Ops & Analytics Cost-Plus Fi
Slide 8: Mission-Centric Solutions at the Forefront of National Security
Mission-Centric Solutions at the Forefront of National Security MISSIONS SUPPORTED INTEL CYBER COUNTER TERRORISM SCOPE OF SERVICES Airborne Space Ground Cyber Infrastructure COLLECT TRANSPORT & STORE ANALYZE OPERATE TRAINING Solving the toughest technology problems, turning raw information into acti
Slide 9: Intelligence, Surveillance and Reconnaissance Products & Solutions
Intelligence, Surveillance and Reconnaissance Products & Solutions Sector Overview & Growth Opportunities Proprietary Technologies Customers • ISR sector anticipated to reach Confidential $46.5B by 2024 Cyber Ops Mission IT Scalable, software-defined synthetic aperture radar, configurable for a vari
Slide 10: Advanced Cyber Operations Solutions
Advanced Cyber Operations Solutions Sector Overview & Growth Opportunities Proprietary Technologies Customers • $15B U.S. Government spend on cyber with strong growth projections Cyber Learning Management Environment Cyber Ops Mission IT that provides scalable delivery of • Accelerates our high marg
Slide 11: Mission IT and Analytics (MITA)
Mission IT and Analytics (MITA) Sector Overview & Growth Opportunities Proprietary Technologies Customers • Agile development of secure, scalable infrastructure and Mission IT Cyber Ops & Analytics applications that address national 26% Secure, Easy-to-Manage, Multi-Master security challenges 51% Re
Slide 12: Common Cultures – Shared Values
Common Cultures – Shared Values We care about people. We put We do the country first. right thing. We encourage We like being curiosity. different. We stay nimble. Greater opportunities for employees – greater value for clients 12
Slide 13: KeyW Acquisition Squarely Aligned with ATN Strategy
KeyW Acquisition Squarely Aligned with ATN Strategy • Become a premier government services provider; grow in highly profitable, complementary markets • Accelerate our Cyber Engineering practice with a focus on Information Technology / Operation Technology (IT/OT) • Increase innovation and technical
Slide 14: A Compelling Strategic Fit
A Compelling Strategic Fit Enhanced Value Next-Gen ISR Financial Strength, Leadership in High-Growth, Quick Reaction Capabilities + Resources and Client High-Margin Multi-Billion $ and Technology Access Space-Intelligence Sector Mission IT and Enterprise IT and Highly Full Spectrum IT Capabilities H
Slide 15: Transaction Overview and Strategic Rationale
Transaction Overview and Strategic Rationale Steve Demetriou, Chair & CEO Advancing our Profitable Growth Strategy Terry Hagen, Chief Operating Officer and President of Aerospace, Technology and Nuclear Financial Overview Wrap Up Steve Demetriou, Chair & CEO 15 Q&A
Slide 16: Value-Creating Opportunity
Value-Creating Opportunity Attractive business sectors, including increased ISR revenue mix and cost synergies, Enhanced Margin Expansion to provide margin expansion Cost Synergies Estimate ~$15 M run-rate by end of FY20 with $25 million cost to achieve synergies Immediately Accretive to Adj. Expect
Slide 17: Substantial Opportunities to More than Double KeyW's Adj. Pro Forma EBITDA by 2022
Substantial Opportunities to More than Double KeyW’s Adj. Pro Forma EBITDA by 2022 Multiple areas of growth driven by EBITDA Growth • Differentiated technology and capabilities • Committed backlog and robust current pipeline • Enhanced competitiveness • Upside from adjacent opportunities Attractive
Slide 18: KeyW is Additive to ATN's Organic Growth Outlook
KeyW is Additive to ATN’s Organic Growth Outlook 2021 Organic Targets Est. KeyW 2018 PF (Feb 2019) Additional Impact >100 Revenue $3.9B 2-3%1 bps >200 Adj. Operating Profit $265M 8-10%1 bps +100 to Adj. Operating Profit Margin ~7% 150 bps >50 bps 1 Three Year CAGR 18
Slide 19: Strengthens Path to Drive 2021 Potential Earnings Power
Strengthens Path to Drive 2021 Potential Earnings Power Fiscal 2019 Potential 2021 Earnings Power Guidance ~$8 ~$7 Leverage <2.5x Leverage <2x $4.40 to $4.80 Strong organic growth – combined with balance sheet capacity – drives significant EPS upside 19
Slide 20: Focused, Disciplined and Agile Capital Allocation
Focused, Disciplined and Agile Capital Allocation Organic Profitable Growth Strategy Focus ✓ Investment in higher margin businesses ✓ Disciplined cost management ✓ Proactive, ongoing portfolio evaluation Value-Creating M&A Discipline ✓ KeyW acquisition aligned with ATN strategy ✓ IRR to exceed risk
Slide 21: A Compelling Strategic Fit
A Compelling Strategic Fit Enhanced Value Next-Gen ISR Financial Strength, Leadership in High-Growth, Quick Reaction Capabilities + Resources and Client High-Margin Multi-Billion $ and Technology Access Space-Intelligence Sector Mission IT and Enterprise IT and Highly Full Spectrum IT Capabilities H
Slide 22: Q&A
Q&A
Slide 23: KeyW 2018 Adjusted EBITDA Reconciliation Table
KeyW 2018 Adjusted EBITDA Reconciliation Table ($ in millions) KeyW Reported FY18 Adjusted EBITDA Less: Stock based compensation Less: Impact from flight services Jacobs estimated KeyW Pro Forma FY18 Adjusted EBITDA 23
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