KBR To Acquire Frazer-Nash Consultancy For $400M

KBR, Inc. KBR has entered into a definitive agreement with Babcock International Group PLC BCKIF to acquire Frazer-Nash Consultancy Limited, a provider of systems engineering, assurance, and technology advisory services, for ~$400 million in cash.
Frazer-Nash delivers high-end systems engineering, systems assurance, and technology to solve complex challenges.
KBR expects the acquisition to realign its portfolio and cost structure in the U.K. With modest revenue and cost synergies, the purchase price multiple is ~12X adjusted 2022 EBITDA.
Frazer-Nash's revenue outlook for FY22 is $150 million to $170 million with adjusted EBITDA margins in the upper-teens and strong free cash flow generation.
KBR expects the Frazer-Nash acquisition to be ~$0.10 accretive to adjusted EPS in FY22.
Frazer-Nash will become part of KBR's Government Solutions segment.
KBR targets to close the acquisition in the third or fourth quarter of 2021.
KBR to fund the purchase price with ~$175 million of international cash on hand and $225 million of debt. It held $483 million in cash and cash equivalents as of June 30, 2021.
Price Action: KBR shares are lower by 0.07% at $39.35 on the last check Friday.