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Jacobs Engineering Slashes Fair Value of Intangibles in Software Acquisition
Engineering firm is paying more and getting less than it originally estimated.
May 3, 2022
Jacobs Engineering Group (J), a construction, design, and information technology consulting firm, is paying slightly more for a multi-million cybersecurity acquisition it now estimates has far fewer assets than originally thought. In the footnotes of its latest quarterly report, Jacobs disclosed the new price tag for BlackLynx, a cybersecurity software company, is $235.4 million, or approximately a half million dollars more than when the deal was announced.

The increase in price isn’t meaningful but the change in fair value of the assets acquired is. Originally, Jacobs estimated it had purchased $103.5 million of intangible assets, or the equivalent of 43.8% of the acquired firm’s balance sheet. Jacob’s now estimates BlackLynx’s intangibles are worth less than half the original sum, or $48.5 million, and now account for just 17.4% of the acquired firm’s balance sheet.

Accordingly, the deal’s goodwill was increased by approximately one third to $199.6 million. Goodwill now comprises 84.6% of the acquisition price. None of it is expected to be deductible for tax purposes.

Jacobs acknowledged the changes in fair value but offered no explanation.

The company included boilerplate language regarding price allocation being based on preliminary information and subject to change. DuDil has asked Jacobs for additional detail about what exactly it learned following the due diligence process that resulted in such a significant change.

We’ll update clients when we have new information.
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