Jacobs set to split in two by cleaving off government services

ENGINEERING and consulting firm Jacobs is splitting into two firms by spinning off its government services business.

Its board of directors has unanimously approved a plan to separate off its Critical Mission Solutions (CMS) business to streamline Jacobs, and focus on using its consulting, planning, engineering, design, and program management capabilities to address infrastructure and advanced manufacturing challenges. Jacobs, which generated US$10.5bn in revenue last year, will continue its focus on water and environment, energy transition, and transportation. It has recently won work including a four-year framework to design and engineer remotely operated tools for the ITER fusion power project being built in France; and providing consulting services to the UK’s Anglian Water to help manage its response to climate change.

Bob Pragada, CEO of Jacobs, said: "By separating CMS, we will streamline our business portfolio and transform Jacobs into a higher-growth, higher-margin company more closely aligned with key global mega trends and growth sectors.”

CMS generated US$4.4bn in revenue last year and provides technical consulting, applied science research, training, and program management services to government agencies. This has included projects on nuclear remediation, space technology, national security, and communications technology. Among its headline projects, it is working with NASA as the prime contractor for the Artemis programme which includes supporting the development of the Orion spacecraft that will carry humanity back to the moon.  

Pragada said: “For the CMS business, the benefits from the separation are equally compelling. CMS has grown to be an industry leading government services provider with significant scale, differentiated services, and deep client relationships. As an independent company, CMS will be better able to focus on its distinct strategy and operating needs, driving further momentum in its business. We believe the separation will create value for all stakeholders."

Jacobs expects to complete the separation next year.