URS wraps up $3.1 billion Washington Group buy

San Francisco Business Times - by Steven E.F. Brown

URS Corp. completed its deal to buy Washington Group International Inc. for $3.1 billion in cash and stock.

Stockholders in both companies approved the deal at special meetings Thursday. The merger, originally proposed at about $2.6 billion, hit stumbling blocks when some major Washington Group shareholders said the deal undervalued the company. URS then sweetened its offer.

The new company, which will have some 54,000 workers, will be called URS Corp.

San Francisco-based engineering and construction giant URS (NYSE: URS) is led by CEO Martin Koffel and has about 29,500 workers. Washington Group (NYSE: WNG), based in Boise, Idaho, has about 25,000 workers.

Washington Group is part of the groups managing Lawrence Livermore National Laboratory and Los Alamos National Laboratory in New Mexico for the U.S. Department of Energy. San Francisco-based Bechtel Corp. and the University of California are also part of those management groups. The Livermore group takes over management of the lab in October, though some changes have already started there.

Washington Group -- founded in 1912 in Boise as Morrison-Knudsen Corp. -- has a major division that does nuclear cleanup and remediation for the Department of Energy. The company is working as a subcontractor for Bechtel at the Hanford Nuclear Reservation in Washington. Morrison-Knudsen merged with Washington Construction Co., a Montana company, in 1996 after forcing out CEO William Agee, who had come to Morrison-Knudsen from Bendix. The company focused on heavy civil engineering projects, including Tarbela Dam on the Indus River in Pakistan, one of the largest earth-filled dams in the world.

URS will pay Washington Group stockholders $43.80 in cash and 0.9 shares of URS common stock for each Washington Group share.

If Washington Group's shareholders want just cash or just stock, they can choose $95.11656 in cash per Washington Group share, or 1.6681731 shares of URS stock and no cash for each Washington Group share. The deadline for that decision by each shareholder is Nov. 20.

Together, the two companies are at work on projects in 50 different countries.