When CH2M sold $300 million worth of stock in 2015 to private equity investor Apollo Global Management LLC, the company was in a weakened condition due to losses on fixed-price contracts. The terms of the preferred stock deal included Apollo’s right to elect up to two corporate directors. CH2M’s annual report for the year mentioned that the new investor may want to “exercise influence over us.”
In a July 19 note to investors, Andrew J. Wittmann, chief industry analyst at Baird Equity Research, says, “The terms of Apollo’s [roughly] 20% investment practically necessitates a transaction for CH2M over a fairly compressed time period.” His comment comes in response to recent unconfirmed reports of a potential deal for Dallas-based Jacobs Engineering to buy CH2M for about $1.5 billion.