8-K: Amentum Holdings Completes Merger, Reports Pro Forma Financials for 2024

Amentum Holdings, Inc. files pro forma financial statements following the completion of its merger with a Jacobs Solutions Inc. business unit, providing a snapshot of the combined entity's operations for the year ended September 27, 2024.

Summary

• Amentum Holdings, Inc. has filed an 8-K report including unaudited pro forma condensed combined statement of operations for the year ended September 27, 2024.
• The filing relates to the completion of the merger involving Jacobs Solutions Inc., Amentum, and related entities.
• The merger involved Jacobs transferring its CMS and C&I businesses to SpinCo (now Amentum) in exchange for stock and $911 million in cash.
• Jacobs distributed shares of SpinCo to its shareholders, and Legacy Amentum merged with SpinCo, with Amentum as the surviving entity.
• Post-merger, Jacobs and its shareholders own 58.5% of Amentum, Amentum Equityholder owns 37.0%, and 4.5% is held in escrow pending achievement of operating profit targets.
• On February 17, 2025, an agreement was made to release 0.5% of the escrowed shares to Jacobs as part of the Additional Merger Consideration.
• The pro forma statement assumes the entire 4.5% of Additional Merger Consideration will be released to Jacobs.
• The pro forma statement was prepared using the acquisition method of accounting, treating Legacy Amentum as the acquirer of SpinCo.
• The statement includes adjustments for the Separation and Distribution, Merger Transaction Accounting, and Financing Adjustments.
• Revenues are reported as $13.858 billion and Net (loss) income attributable to common shareholders is $(82) million.
• The company issued $1,000 million in senior notes due 2032 and entered into a new credit agreement for $3,750 million.
• The pro forma statement is for informational purposes and does not represent actual past or future financial performance.

Sentiment

Score: 5

Explanation: The sentiment is neutral. While the merger is a significant event, the pro forma financials show a net loss, and there are integration risks. The company has also taken on a significant amount of debt.

Positives

• The merger creates a larger, combined entity with potentially greater market presence.
• Jacobs received $911 million in cash as part of the transaction.
• The company has secured significant financing through senior notes and a credit agreement.

Negatives

• The pro forma statement shows a net loss attributable to common shareholders of $(82) million.
• The final determination of the Additional Merger Consideration is still in process.
• The pro forma statement does not reflect potential dis-synergies or costs of operating as a standalone company.

Risks

• The pro forma financial information is based on estimates and assumptions that are subject to change.
• The final purchase price allocation may differ materially from the preliminary estimates.
• Amentum may be unable to replace shared services previously received from Jacobs in a timely manner or on favorable terms.
• The pro forma statement does not give effect to the potential impact of current financial conditions.
• There are no assurances of the timing or amount of any cost synergies able to be captured, or the costs necessary to achieve those cost synergies.

Future Outlook

The unaudited pro forma condensed combined statement of operations is for informational purposes only and does not purport to represent what Amentum's financial position and results of operations actually would have been had the Pro Forma Transactions occurred on the dates indicated, or to project Amentum's financial performance for any future period.

Industry Context

The merger positions Amentum as a significant player in the government and infrastructure services market, competing with companies like AECOM, Fluor, and KBR. The pro forma financials provide investors with a view of the combined entity's scale and potential synergies.

Comparison to Industry Standards

• Comparing Amentum's pro forma revenue of $13.858 billion to competitors like AECOM (approximately $14 billion annual revenue) suggests a similar scale of operations.
• The net loss of $(82) million should be assessed in the context of integration costs and potential synergies, compared to the profitability of peers like Fluor and KBR.
• The debt levels should be compared to industry averages and assessed for their impact on Amentum's financial flexibility.

Stakeholder Impact

• Shareholders: Impacted by the merger, ownership changes, and financial performance of the combined entity.
• Employees: Integration of workforces and potential changes in roles and responsibilities.
• Customers: Potential for enhanced service offerings and expanded capabilities.
• Creditors: Impacted by the new debt structure and Amentum's ability to service its debt obligations.

Next Steps

• Final determination of the Additional Merger Consideration.
• Completion of the purchase price allocation within 12 months of the merger.
• Integration of the SpinCo Business into Amentum's operations.
• Replacement of shared services previously received from Jacobs.

Key Dates