Washington Group International Inc
Washington Group International — Merger or Acquisition (October 2007)
23 slides from Washington Group International's merger presentation, Oct 15, 2007
Slide 1: Shareholder Presentation October 2007
Shareholder Presentation October 2007
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, which are identified by the use of forward-looking terminology such as may, will, could, should, expect, anticipate, intend, plan,
Slide 3: Additional Information and Where to Find It
Additional Information and Where to Find It In connection with the proposed transaction, URS and Washington Group International filed a definitive joint proxy statement/prospectus and other materials with the Securities and Exchange Commission (the “SEC”), and URS filed a registration statement on F
Slide 4: Agenda
Agenda Compelling Business Rationale Superior Value to Shareholders Independent and Robust Process
Slide 5: I. Compelling Business Rationale
I. Compelling Business Rationale
Slide 6: Highly Complementary Businesses
Highly Complementary Businesses Integrated engineering, construction and management services Organized into six business units: Power Energy & Environment Infrastructure Defense Industrial/Process Mining #1 DOE environmental management firm Well-positioned in key growth power and infrastructure mark
Slide 7: Merger Terms
Merger Terms 2.7% of announced transaction value (2.4% of transaction value as of 12-Oct-2007) Reverse break fee of 1.9% of announced transaction value Break fee Stock portion of merger consideration intended to be tax-free to WNG stockholders Taxes Transaction not subject to financing Fully committ
Slide 8: Merger Creates a Well Diversified "Single-Source" Engineering, Construction and Management Services Company
Merger Creates a Well Diversified “Single-Source” Engineering, Construction and Management Services Company Leadership positions in key growth markets Infrastructure and Power Department of Energy and Department of Defense Industry leading global scale Combined revenues of $8.8 billion, 55,400 emplo
Slide 9: Pro Forma Company Leapfrogs Into a Leading Position in the E&C Industry
Pro Forma Company Leapfrogs Into a Leading Position in the E&C Industry Source: Company filings and reports 1 Revenue reported for public companies as of FY 2006. Private companies’ figures are estimated 2006 calendar year figures. 2 Combined revenue for URS and WNG represents the sum of 2006 revenu
Slide 10: Value-Enhancing Merger Structure
Value-Enhancing Merger Structure Value-enhancing merger structure includes a significant stock component, which provides ongoing sector exposure and upside to all shareholders Ability for Washington Group shareholders to participate in combined company synergies Transaction aggressively utilizes bal
Slide 11: II. Superior Value to Shareholders
II. Superior Value to Shareholders
Slide 12: Implied Offer P/E Exceeds WNG's Historical P/E
Implied Offer P/E Exceeds WNG’s Historical P/E Source: Bloomberg and FactSet 1 E&C composite includes CBI, EME, FLR, FWLT, GVA, JEC, MDR, SGR, URS. Multiple represents composite median FY1 P/E multiple since 12-Oct-1992. 2 Implied FY1 P/E multiple at current implied offer based upon implied offer pr
Slide 13: E&C Exposure to Oil & Gas
E&C Exposure to Oil & Gas Source: Public filings, Wall Street research, Bloomberg and CSI Note: E&C Oil & Gas composite consists of Chicago Bridge & Iron, Foster Wheeler, Fluor, McDermott, Jacobs, Shaw Group and KBR Oil & Gas Exposure E&C Oil & Gas vs. WTI Performance 90% 100% 110% 120% 130% 140% 15
Slide 14: Transaction Multiple Represents Second Highest EBITDA Multiple Paid in the E&C Sector
Transaction Multiple Represents Second Highest EBITDA Multiple Paid in the E&C Sector As of the announcement date, the Washington Group / URS transaction had a 15.9x transaction value to LTM EBITDA multiple Source: Company reports, public filings, press releases, Wall Street research and Capital IQ
Slide 15: Substantial Premium Relative to Historical Prices
Substantial Premium Relative to Historical Prices Source: Bloomberg, as of 25-May-2007 Note: Historical price benchmarks are based on volume-weighted average prices over the specified time period 30.6 % 39.3 % 77.4 % 53.2 % 45.5 % $ 91.36 Implied Premium Implied Deal Price (25-May-2007) Implied Deal
Slide 16: Summary of Published Research Prior to Announcement
Summary of Published Research Prior to Announcement Pre-Announcement Positive $88.501 $3.50 $2.67 John B. Rogers D.A. Davidson 08-Aug-2007 Positive NA $3.50 $2.78 Scott Levine JPMorgan 07-Aug-2007 Positive $83.00 $3.85 $2.95 Andy Kaplowitz Lehman Brothers 08-Aug-2007 Recommendation With Regards to O
Slide 17: Preliminary Third Quarter Performance
Preliminary Third Quarter Performance New Work Backlog Revenue Net Income Diluted EPS $1.075 – $1.125 billion $6.125 – $6.175 billion $1.050 – $1.100 billion $39 – $43 million $1.25 – $1.38 Preliminary Q3 2007 Estimates Net Income (-) Coal Mine Sale (-) U.S. DOE Construction Project Adjusted Net Inc
Slide 18: FY 2007 Guidance
FY 2007 Guidance New Work Backlog Revenue Net Income (excluding merger costs) Diluted EPS Increase in guidance is a result of: One-time gain from sale of interest in the Montana coal mine Higher-than-expected earnings in the Power and Infrastructure business units Reduced costs related to liability
Slide 19: III. Independent and Robust Process
III. Independent and Robust Process
Slide 20: Multiple Discussions Conducted with Other Interested Parties
Multiple Discussions Conducted with Other Interested Parties Termination of discussions by Company A Company A Jan-2007 Company A conveys interest in resuming discussions Company A Nov-2006 Initial termination of discussions by Company A Company A 19-Sep-2006 Termination of discussions with Company
Slide 21: Negotiated Successive Increases in Offer which Maintained or Increased Premium
Negotiated Successive Increases in Offer which Maintained or Increased Premium Cash / Stock Consideration 12-Months 6-Months 3-Months 1-Day Total Implied Consideration Current Offer Premium to Price Over Last (as of 25-May-2007) 55% cash / 45% stock 34.1% 27.4% 22.0% 14.3% $80.00 26-May-2007 48% cas
Slide 22: Concluding Remarks
Concluding Remarks Compelling Business Rationale WNG and URS are highly complementary businesses Merger creates a well diversified “single-source” engineering, construction and management services company Leadership positions in key growth markets Industry leading global scale Broader service capabi
Slide 23: Concluding Remarks (cont'd)
Concluding Remarks (cont’d) Superior Value to Shareholders (cont’d) Immediate and certain value for Washington Group shareholders today Mitigates shareholder exposure to unforeseen, adverse business conditions and market dynamics Transaction not subject to financing Shareholders retain upside potent
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