Employee-owned CH2M has reached past its workforce for needed investment to finance growth, agreeing to a minority stake by private equity firm Apollo Global Management LLC that could reach $300 million—a move observers say will ease cash woes and lead to new purchases or even a public offering.

In a May 27 announcement, Jacque Hinman, chairman and CEO of the $5.5-billion, Denver-based global giant that shortened its name in April, says the stake "will help us accelerate growth, provide additional liquidity to our shareholders and ... allow us to consider innovative funding solutions" for public infrastructure.

CH2M posted an 8% revenue drop and a $341.6-million loss in 2014 due to project issues and restructuring costs, including a 5% cut to its 26,000-person staff. One former firm manager says raising capital internally through stock sales is tougher with a younger workforce. "Don't ignore stockholder liquidity issues that limit cash for other uses—this provides relief and opens up more options," adds another industry executive.

"It's clear [that], in the 20 months since Jacque Hinman took over as CEO, CH2M has aggressively engaged in a range of corporate initiatives to improve its current performance and future position," says Steve Gido, principal at AEC management consultant Rusk O'Brien Gido + Partners LLC. "Private equity is a niche but growing part of the AEC sector, although minority stakes are somewhat rare." The Wall Street Journal said Apollo in March bought a 50% stake in part of Australian contractor Leighton Holdings Ltd. One industry executive familiar with PE firm buys says they are easing up on return expectations in more recent years.

"This was the best move under the circumstances," says Paul Zofnass, president of sector financial management firm EFCG. "The losses [CH2M] encountered on some major projects over the past few years are reflective of the increasing risks that firms are being required to take."

Under the arrangement, Apollo will gain two of CH2M's six outside director seats. Apollo partner Antoine Munfakh, who joins the CH2M board, termed the firm a "marquee franchise."