Jacobs' 'Unique' IT Acquisition - Analyst Blog
December 06 2011 - 7:30AM
Zacks
In an effort to expand its
information technology capabilities, Jacobs Engineering
Group Inc. (JEC) recently acquired Unique World, an
IT services provider in Sydney, Australia.
The acquisition allows Jacobs to
expand its IT services, while serving the existing customers such
as mining and minerals clients, the Defense Department and other
public sector agencies and commercial businesses.
The acquisition appears to be the
company’s key expansion strategy in the new and existing locations;
targeting growth possibilities of strong IT services market outside
the U.S. The terms of the agreement has not yet been disclosed.
Looking into the acquired business,
Unique World engaged a strong information and knowledge management
team with a strong delivery focus. Besides, IT services of the
company also concentrated on high value services viz, enterprise
collaboration and intranets and portals solutions using Microsoft
SharePoint Server.
Jacobs’ diversification across
markets, geographies and services has been supporting its growth
even in a competitive environment since years. With a significant
market share, Jacobs presently constitutes a significant part of
huge global infrastructure market. Over time, the company has been
planning to expand into the emerging markets like Australia, China,
Brazil, as well as Asian countries through joint ventures, contract
wins, and acquisitions with a target of diversification into
sectors like oil and gas, mining, IT services and power.
On this backdrop, we view the
latest take-over as a stride toward the company’s strategic and
‘unique’ diversification, both geographically and sectorally. We
believe, in the long run, the acquisition will ensure solidarity of
knowledge exchange, expansion of global resource base and
enhancement of capabilities of both the allies; thereby sustaining
a mutual client-focused culture-conducive to growth.
Jacobs’ worldwide ever-increasing
presence is thus a splendid indication of its strong growth
trajectory in the infrastructure market across the globe. This has
also been winning investor confidence over time and is expected to
continue with such outlook further. The company directly competes
with its peers, viz. Fluor Corporation (FLR) and
Foster Wheeler AG (FWLT).
We currently hold a Neutral
recommendation on the stock. Jacobs has a Zacks #2 Rank, implying a
short-term (1-3 months) Buy rating.
FLUOR CORP-NEW (FLR): Free Stock Analysis Report
FOSTER WHELR AG (FWLT): Free Stock Analysis Report
JACOBS ENGIN GR (JEC): Free Stock Analysis Report
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