Two Private Equity Firms Buy Management Services Arm of AECOM

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The AECOM deal is a win for activist hedge fund Starboard Value

Private equity firms Lindsay Goldberg and American Securities are buying assets from construction giant AECOM.

The target company issued a report this morning saying it agreed to a deal worth $2.4 billion for its management services division. That arm of the company provides logistics and technical services to the Federal government.

Its customers also include the Department of Defense and the Department of Energy. It also provides services to departments and agencies of allied governments. This list includes the U.K. Nuclear Decommissioning Authority and the U.K. Ministry of Defense. Its competitors include Jacobs Engineering Group and KBR.

“The Management Services business is a proven industry leader with distinctive expertise that plays a vital role in supporting governments around the world to execute programs of critical importance,” said Russell Triedman, Partner at Lindsay Goldberg. “We intend to leverage our extensive experience investing in the government services sector, including our prior investments in PAE and ECS Federal, and we look forward to working alongside management and American Securities to thoughtfully grow the Company and its capabilities both organically and through strategic transactions.”

Private Equity Firms Find Value in AECOM assets

Meanwhile, the sale is a win for activist hedge fund Starboard Value.  The hedge fund had further pushed the firm to conduct a strategic review of its assets. Starboard owned roughly 4% of the company in June.

At the time, the fund delivered a letter to AECOM Chairman and CEO Michael Burke. Starboard specifically mentioned its management services division as a potential source of value.

Finally, shares of AECOM stock (NYSE: ACM) added more than 6.4% during Monday’s trading session.

[Related: Hedge Fund Starboard Value Gets Papa John’s a New CEO]

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