Jacobs Engineering Group Inc. (JEC) has incorporated a new company named LeighFisher Inc. The company will be a wholly-owned subsidiary of Jacobs and will initially work as a consultant to the transportation sector. However, some time later LeighFisher plans to expand into other industries.
This would definitely enhance Jacobs’ revenue, which was in excess of $11 billion in the fiscal year 2009.
Jacobs is one of the leading providers of professional, technical and construction services to industrial, commercial and government clients. Jacobs’ ongoing acquisition strategy will help strengthen its position in the future.
Jacobs has a successful record of more than 33 acquisitions over the last 20 years. The Babtie acquisition (completed in August 2004) has provided many opportunities for Jacobs, including expansion into the U.K. market, organic infrastructure growth opportunities and entry into the rapidly-growing markets of Ireland and Eastern Europe.
Jacobs acquired a 60% interest in Zamel & Turbag Consulting Engineers (Zate) in March 2008 in order to expand its business in the Middle East. In the first half of fiscal 2010, Jacobs acquired Jordan, Jones and Goulding, Inc. (JJG), a professional services firm, in order to expand into the water and wastewater market.
However, the industry in which Jacobs operates is highly cyclical in nature and subject to significant fluctuations due to a wide variety of uncontrollable factors, including economic conditions and changes in client spending, particularly during periods of economic uncertainty.
A continuation or worsening of weak economic conditions or a reduction in government spending could have an adverse impact on the business, financial condition and results of operations. Thus, we reiterate our Neutral recommendation.
Read the full analyst report on “JEC”
Read the full analyst report on “JJG”
Zacks Investment Research
