Jacobs will operate KeyW as a bolt-on acquisition for the first six months while it addresses redundant costs, but the company will then make decisions about how to further integrate the contractor, a top Jacobs executive told Inside Defense this week.
Jacobs announced Monday its plan to acquire KeyW in an $815 million deal. The company plans to include KeyW in its aerospace, technology and nuclear business.
The ATN unit in fiscal year 2018 reported $4.4 billion in sales, up 77% from FY-17. The business grew substantially from Jacobs' late 2017 acquisition of CH2M and the associated nuclear and environmental sales included in the ATN segment.
In a phone interview, Terry Hagen, who heads the ATN business, said this week the KeyW purchase will help Jacobs as it seeks to move into parts of the government services sector “tied to national priorities.”
He said the company was seeking a stable and resilient business with higher margins.
“All of those things match really well with what we saw in KeyW,” Hagen said.
In the early days following the close of the deal, Jacobs will address cost synergies, which he said can largely be achieved by addressing the redundant costs associated with KeyW's status as a public company as well as real estate.
“We want to take a good six months,” Hagen said. “You always learn more when you're together.”
Hagen said those cost-cutting measures will immediately improve KeyW's competitiveness.
He said after about six months, Jacobs will move to make “measured, balanced decisions” about how to further integrate KeyW into the business. That will include finding the right organizational structure.
Hagen said Jacobs is focused on retaining KeyW employees, including managers, and said Jacobs will have an active communication program with employees and put incentives in place to retain “particularly key leaders.”