Jacobs' PA Acquisition Deepens Shift to High-Value Advisory

Jacobs Solutions Inc. J recently announced that it has agreed to acquire the remaining stake in PA Consulting, a leading innovation and transformation consultancy. The transaction, valued at £1.216 billion (approximately $1.6 billion), is expected to close by the end of the second quarter of fiscal 2026.

Through this strategic move, Jacobs aims to establish a global advisory powerhouse, delivering solutions that enhance capital efficiency, accelerate innovation and create sustainable long-term value for clients. The acquisition also strengthens the company’s presence in adjacent, high-value advisory, transformation and artificial intelligence (AI) domains, while improving margin structure and unlocking meaningful cross-collaboration opportunities across a complementary customer base.

Shares of Jacobs gained 2.6% during the trading session yesterday.

A Financially Accretive, Strategic Expansion for Jacobs

The partnership over the past four-plus years has established a strong foundation to enhance Jacobs’ margin profile and unlock meaningful synergies, including incremental cross-selling opportunities. In the second half of fiscal 2025, PA Consulting capitalized on robust demand, delivering double-digit growth in both revenues and operating profit. This collaboration has accelerated profitable growth and strengthened Jacobs’ leadership as it redefines the asset lifecycle — engaging clients earlier and expanding its reach across strategy, transformation and advisory services.

With the completion of this acquisition, Jacobs will broaden its exposure to fast-growing, resilient end markets such as advanced manufacturing, life sciences and critical infrastructure, including energy and transportation. The transaction will also expand the company’s presence in high-value advisory and AI/digital engagements. Together, Jacobs and PA are well-positioned to accelerate AI-driven business transformation and deliver advanced digital and artificial intelligence solutions internally and for clients.

Jacobs outlined the transaction’s margin and earnings impact, noting that full ownership of PA Consulting in fiscal 2025 would have resulted in an adjusted EBITDA margin of 14.5%, compared with the reported 13.9%. The company also expects to achieve £12-£15 million in cost synergies within 24 months of closing, with the transaction anticipated to be accretive to adjusted EPS within the first year post-close.

J’s Share Price Performance

Jacobs’ stock has gained 4.9% in the last six months compared with the Zacks Building Products - Miscellaneous industry’s 14.8% growth. Despite ongoing global market uncertainties, the company is expected to benefit from sustained demand across life sciences, data centers, energy, water and transportation, supported by elevated public- and private-sector spending in the period ahead.

Major award wins in fiscal 2025 reflect sustained momentum and underscore the broad secular tailwinds supporting growth across the business. The company continued to generate robust bookings, remained disciplined in its capital return strategy and entered the second year of its strategic cycle, which is well-positioned to achieve its long-term objectives.

J’s Zacks Rank & Key Picks

Jacobs currently carries a Zacks Rank #3 (Hold).

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This article originally published on Zacks Investment Research (zacks.com).

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