CH2M secures $300M investment backing to strengthen financial position

Apollo Global Management steps in as investment partner with cash to help company “achieve its strategic objectives” for growth.

Antony Oliver
29 May 2015

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US consulting giant CH2M this week agreed a $300M investment partnership to secure its financial position. 

Investment management specialist Apollo Global Management has agreed to invest $200M in CH2M stock and will then plough a further $100M investment into the business during the next 12 months in return for two positions on the CH2M board.

“This investment will add to our financial strength and is the right next step toward spurring CH2M’s continued growth,”  CH2M chairman and chief executive Jacque Hinman.

CH2M said that proceeds from the deal will fuel the $5.5bn turnover business’ “growth initiatives, market leading positions, and integrated client service capabilities” and enable the business to take advantage of the growing global market for its infrastructure services.

“This investment will add to our financial strength and is the right next step toward spurring CH2M’s continued growth,” said CH2M chairman and chief executive Jacque Hinman. 

“There is an enormous and expanding need for the work that CH2M does so well – solving some of the world’s toughest infrastructure and natural resource challenges,” she added. “The financial and strategic benefits from Apollo’s investment and partnership will help us accelerate our growth, deepen our partnership with clients, push the limits on innovation, increase opportunities for our employees, and provide additional liquidity to our shareholders.”

She said: “This transaction will also allow us to consider innovative funding solutions to help our public sector clients meet their growing infrastructure needs.”

The Apollo deal, which is expected to concluded during the second quarter of this year, will meant the business is no longer wholly owned by its employees. 

It comes after CH2M went through a major restructuring programme in 2014, a programme which cut around 1200 of its 25,000 global workforce in an attempt to boost efficiency and “rightsize” the business following a number of acquisitions.

“Apollo has substantial expertise and a track record of success in making strategic equity investments in strong operating companies, including in the infrastructure and natural resources arena,”  Hinman.

These included the purchase of £230M purchase of Halcrow in 2011, a deal which subsequently required substantial investment and restructuring.

The US based CH2M has operated in the UK for over 20 years where it employs over 3,000 people staff. Currently the firm is working on major infrastructure programmes including High Speed 2, Thames Tideway Tunnels, the decommissioning of Dounreay, management of Defence Equipment and Support (DE&S) services for the Ministry of Defence.

Previously it was one of the leading partners in CLM, Delivery Partner to the ODA for the London 2012 Olympic & Paralympic Games.  

After the deal concludes, Apollo will hold two of six independent director seats on CH2M’s board of directors, while CH2M employees hold seven board seats.

Apollo was formed in 1990 and currently has $163 billion in assets under management. According to CH2M its track record of socially responsible investment made it a good fit as a partner.

“Apollo has substantial expertise and a track record of success in making strategic equity investments in strong operating companies, including in the infrastructure and natural resources arena,” said Hinman. 

“The world has critical infrastructure and natural resource needs, and we believe Apollo and CH2M will be great partners in addressing these global challenges.” Antoine Munfakh, Apollo

“But just as important for us, Apollo is a great cultural fit. Our dedication to strong values in corporate citizenship, ethics, safety and sustainability is highly valued and shared by the Apollo team.” 

Antoine Munfakh, the lead investment partner for Apollo for the deal, will join CH2M’s board of directors. 

Commenting on the deal he said: “CH2M remains a market leader serving attractive end markets with compelling opportunities for both domestic and global growth. We look forward to bringing Apollo’s resources to bear in furthering that success and helping the company achieve its strategic objectives.  “The world has critical infrastructure and natural resource needs, and we believe Apollo and CH2M will be great partners in addressing these global challenges.”