On the Heels of the Los Angeles Community College District Selecting URS & DMJM to Manage a $2.2 Billion College Improvement Program - San Francisco Based URS Corporation Buys Out Washington Group International

BOISE, Idaho - Washington Group International shareholders approved a $3.1 billion buyout Thursday by rival URS Corp. to create the nation's biggest engineering and construction company.

The cash-and-stock deal was approved by 53 percent of Washington Group's outstanding shareholders during a special meeting in Boise, ending weeks of speculation that many shareholders believed Washington Group's offer was too low.

URS shareholders also signed off on the deal, clearing the way for the San Francisco-based company to take control late Thursday. URS said the acquisition cost $3.1 billion, down from a $3.2 billion estimate made last week when it raised its offer to win over Washington Group shareholders. WGI Chief Executive Officer Steve Hanks said the takeover by URS would create a company of 55,000 employees with more than $8 billion in annual revenue and unrivaled potential to win government and private contracts globally.

"We will have the largest human resource footprint in the industry," Hanks told The Associated Press. "This is a great opportunity to expand and grow this company. This comes at a time when demand for our services is at an all-time high."

It took some time and deal sweetening to win over the majority of Washington Group shareholders. The resistance forced Washington Group to postpone an Oct. 30 shareholder meeting and give management more time to lobby shareholders. After some haggling last week, San Francisco-based URS agreed to throw in more of its stock to boost the proposed purchase price by about $200 million.

URS and Washington Group valued the sweetened bid at $97.89 per share, 8.5 percent better than the original offer of $90.20 per share. Shareholders representing more than 29 million outstanding shares were eligible to take part in voting Thursday. Under terms of the deal, Washington Group shareholders can elect to receive cash, stock, or cash and stock for their shares. Executives say the combined company will be more diverse, nimble during economic slowdowns, and better positioned to compete for contracts for roads, bridges, power plants, oil and gas projects and alternative energy ventures.

Hanks said the combination coincides with a push by governments and private industry on new projects and infrastructure. He said global energy companies alone are poised to invest $2 trillion over the next decade in oil and gas development. Governments and utilities are investing millions studying nuclear energy and plant designs, he said. Hanks says WGI's headquarters in Boise will be made smaller and that some departments could be folded into operations elsewhere.

"Clearly there will be change," Hanks said. "But if there were ever a time to go through a change, it's at a time like this."

Washington Group shares rose $6.99, or 7.6 percent, to $99 Thursday. URS shares rose $5.95, or 10.7 percent, to close at $61.70.

by TODD DVORAK
Associated Press Writer

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