Jacobs Solutions Inc.’s board of directors has unanimously approved a plan to separate its Critical Mission Solutions business from Jacobs, to create two independent companies.
“Today’s announcement is a significant milestone in our long record of taking bold actions to drive value creation,” said Jacobs’ CEO Bob Pragada. “By separating CMS, we will streamline our business portfolio and transform Jacobs into a higher-growth, higher-margin company more closely aligned with key global mega trends and growth sectors.”
As separate companies, Jacobs and the CMS business can pursue individualized strategies and operational initiatives specific to the industries in which they operate.
The company said they’ll also have tailored capital allocation and structure, including equity, directed toward their respective growth opportunities. The move will strengthen the ability to attract and retain top talent through incentive programs more closely aligned with individual business performance.
Following the separation, Jacobs will continue to be a technology-enabled solutions provider focused on addressing complex critical infrastructure and advanced manufacturing challenges.
CMS, which generated approximately $4.4 billion in revenue in fiscal year 2022, provides technical consulting, applied science research, training, intelligent asset management and program management services to federal agencies.
The proposed capital structure, governance and other matters relating to CMS are still being determined and will be communicated later, the company said.
Jacobs aims to complete the separation in the second half of fiscal year 2024.