Dallas-based Jacobs Engineering Group has agreed to purchase Denver-based CH2M Hill for $2.85bn, the companies announced on 2 August.

The deal, which includes a cash and stock transaction of $3.27bn, with Jacobs acquiring $415m of CH2M debt, could close late this year.

Jacobs focuses on the petroleum and chemicals sector, where it provides consulting, engineering, maintenance and project management services. It also provides construction, nuclear and technical support services to the aerospace and defence sectors. CH2M Hill is a leader in the infrastructure and government service sectors, including water, transportation, environmental and nuclear. CH2M stockholders would own 15% of the Jacobs shares The deal is expected to more than double Jacobs' revenue from its buildings and infrastructure business.

Jacobs plans to finance the cash portion of the deal with cash on hand, borrowings under its existing revolving credit facility and $1.2bn new debt arranged by BNP Paribas and the Bank of Nova Scotia. The deal would add about 15% to Jacobs' adjusted earnings per share and 25% to its adjusted cash earnings in the first full year, following its closure in December 2017. Jacobs expects to save $150m in costs by the end of the second year.

CH2M Hill owns CH2M Hill Plateau Remediation Co, a US Department of Energy (DOE) contractor at the Hanford nuclear site, where it employs about 1700 people as part of its responsibility for environmental cleanup, with the exception of radioactive waste held in underground tanks. One of its key current projects at the site is the demolition of the Plutonium Finishing Plant.

Jacobs is one of three owners of Mission Support Alliance, with Leidos, the lead owner. Mission Support Alliance employs about 1900 people, provides site-wide services and integrated infrastructure to reduce operating costs and to support the clean-up mission at Hanford.

Jacobs said in a statement that the purchase better positions the company for government contracts. The US Department of Energy is preparing to rebid some Hanford cleanup contracts, including those held by CH2M Hill Plateau Remediation Co. and Mission Support Alliance, before they expire in 2018 and 2019.

“CH2M’s preeminent brand for programme and project delivery in large scale environmental remediation in the nuclear industry, coupled with Jacobs’ complementary experience with governmental agencies around the world, including nuclear decommissioning, create significant business expansion opportunities,” Jacobs said.