Filed
by
Washington Group International, Inc.
Pursuant
to Rule 425 under the Securities Act of 1933
And
Deemed Filed under the Securities Exchange Act of 1934
Subject
Company: Washington Group International, Inc.
Commission
File No. 001-12054
Date:
November 5, 2007
Nov.
5,
2007
Dear
Fellow
Washington Group International Employee:
Attached
you will
find a news release announcing an amended agreement for URS Corporation to
acquire Washington Group International on increased and more flexible financial
terms. The amended merger agreement provides Washington Group stockholders
with
$43.80 per share in cash and 0.90 shares of URS stock for each share they own;
enables Washington Group stockholders to own approximately 35 percent of the
combined company; and provides Washington Group stockholders with the
flexibility to receive (subject to adjustment) the merger consideration in
cash
and stock, entirely in cash, or entirely in stock.
Washington
Group
stockholders will vote on the proposed merger at a special meeting of
stockholders, which has been rescheduled for Nov. 15, 2007. We expect the
transaction to close in the second half of the fourth quarter of 2007 and look
forward to offering our customers the full breadth of quality services that
this
combined company will be able to provide.
This
increased
offer again highlights the strength of the company we have built together.
We
continue to be excited by the strategic rationale behind this transaction -
that
we will be creating a single-source provider that can offer a full life cycle
of
planning, engineering, construction, environmental management, and operations
and maintenance services.
I
want to thank you for all that you have done throughout this process to stay
focused and continue to deliver the superior quality and service our customers
have come to expect.
Thank
you.
Sincerely,
Steve
Hanks
FOR
IMMEDIATE RELEASE
URS
AND WASHINGTON GROUP INTERNATIONAL AMEND MERGER AGREEMENT TO INCREASE MERGER
CONSIDERATION
URS
Increases Stock Component and Gives WNG Stockholders Right to Elect Cash, Stock,
or Cash and Stock; Says Offer is “Best and Final”
Stockholder
Meetings Rescheduled For November 15
SAN
FRANCISCO,
CA and BOISE, ID - November 5, 2007
- URS
Corporation (NYSE: URS)
and
Washington Group International, Inc. (NYSE: WNG)
today
announced that their previously announced
definitive
merger agreement for the acquisition of Washington Group by URS
has been
amended to increase the consideration to be received by Washington Group
stockholders and to provide them with the ability to elect to receive cash,
stock or cash and stock for their shares (subject to proration).
Based
on
the closing price of URS’ common stock on November 2, 2007, the consideration is
now valued at approximately $3.2 billion, or $97.89 per Washington Group share,
which represents a premium of approximately 8.5% over the initial merger
consideration value of $90.20 as of such date. Based on the volume weighted
average price of URS’ common stock during the five trading days ending on
November 2, 2007, the consideration is now valued at approximately $3.2 billion,
or approximately $99.00 per Washington Group share, compared with a value of
approximately $3.0 billion, or $91.14 per Washington Group share (using the
five
trading day weighted average), under the terms of the original merger agreement.
Under
the
terms of the revised merger agreement, which has been unanimously approved
by
the boards of directors of both companies, Washington Group stockholders can
elect to receive all cash, all stock, or a combination of cash and stock
(subject to proration) with a consideration value of 0.900 shares of
URS
common stock
plus
$43.80 in cash for each Washington Group share. The proration will be determined
based on the volume-weighted average price of URS’ common stock during the five
trading days ending on the day before the required Washington Group stockholder
approval is received. This five trading day period is currently scheduled to
end
on November 14, 2007. The election procedures are subject to proration to
preserve an aggregate per share mix of 0.900 shares of
URS
common stock
plus
$43.80 in cash for all outstanding Washington Group shares and options (after
giving effect to the options’ exercise prices). Based on the outstanding shares
and options of Washington Group as of September 30, 2007, in the aggregate,
Washington Group shares and options will be converted into approximately $1.4
billion in cash and approximately 29 million shares of
URS
common stock.
All
terms of the original merger agreement not related to the revised merger
consideration remain substantially unchanged.
Upon
completion of the transaction, Washington Group stockholders would own
approximately 35% of the combined company, compared with approximately 32%
under
the terms of the original merger agreement. Stockholders of record of URS common
stock and Washington Group common stock at the close of business on September
21, 2007 will be entitled to vote at the special meetings.
Washington
Group also announced that Dennis Washington, Chairman of the Washington Group
board of directors, has executed a binding agreement to exercise all of his
beneficially owned stock options for 3.224 million shares of Washington Group
stock (or approximately 10% of outstanding Washington Group stock) and vote
his
shares in favor of the revised merger agreement if necessary to achieve the
required Washington Group stockholder approval. If it is necessary for Mr.
Washington to exercise his options and vote his shares, a new record date and
meeting date for the Washington Group special meeting will be set. Mr.
Washington has indicated that he intends to make the necessary Hart-Scott-Rodino
Act filing today in order to be able to exercise his options, and has also
indicated that if the merger is completed he would elect to receive cash for
all
of his Washington Group shares (subject to proration).
Martin
M.
Koffel, Chairman and Chief Executive Officer of URS, said: “The enhancement to
the terms of our agreement reflects URS’ commitment to the combination with
Washington Group and our conviction that the transaction will create significant
benefits for the stockholders, customers and employees of both companies. We
believe that the recent strong performance of both companies and continued
positive outlook for our businesses warrant the increase in our offer. However,
URS is a disciplined buyer and these terms represent our best and final offer
for Washington Group.”
“We
are
very pleased to present this increased consideration to our stockholders for
their vote at our special meeting next week,” said Washington Group President
and Chief Executive Officer Stephen G. Hanks. “The increased financial terms of
our agreement with URS provide even greater value to Washington Group
stockholders, as well as a higher level of continued ownership in the combined
entity and greater flexibility to choose between cash and stock in exchange
for
their shares. The combination of Washington Group and URS represents a unique
opportunity to create a single-source provider that can offer a full life cycle
of planning, engineering, construction, environmental management, and operations
and maintenance services. Our board of directors unanimously recommends that
Washington Group stockholders vote in favor of the merger
agreement.”
URS
expects the transaction to be slightly dilutive to GAAP earnings per share
(“EPS”) in 2008, accretive to GAAP EPS in 2009 and beyond, and accretive to its
cash EPS in 2008 and beyond, not including revenue synergies expected through
the combination.
Consummation
of the transaction is subject to the approval of the revised definitive merger
agreement by Washington Group stockholders holding a majority of the outstanding
shares and the approval of the issuance by URS of shares of common stock in
the
transaction by URS stockholders holding a majority of the shares voting. URS
and
Washington Group have rescheduled the companies’ special meetings of
stockholders for November 15, 2007 to provide investors with additional time
to
evaluate the revised offer. Supplemental proxy materials will be distributed
to
URS and Washington Group stockholders prior to the new meeting
date.
The
special meeting of URS stockholders will be held at 9:00 a.m., local time,
at
the
offices of Cooley Godward Kronish LLP, located at 1114 Avenue of the Americas,
New York, New York. The special meeting of Washington Group
stockholders
will be
held at 7:00 a.m., local time, at Washington Group’s offices located at 720 Park
Boulevard, Boise, Idaho.
URS
Outlook for Fiscal 2007
URS
also
announced that it has revised its outlook for fiscal 2007 based on revenue
growth for the nine months of 2007 and the company’s continued positive outlook
for its markets. URS now expects that 2007 revenues will be approximately $4.85
billion compared to its prior estimate of $4.8 billion. Assuming this revenue
expectation is met, URS now expects that 2007 net income will be approximately
$134 million compared to its prior estimate of $132 million and now expects
that
earnings per share will be between $2.50 and $2.55. Previously, URS had expected
that EPS would be between
$2.45
and
$2.50
.
URS
noted
that the guidance provided above does not include the impact of the proposed
acquisition of Washington Group. URS will provide additional details regarding
its fiscal 2007 guidance on its third quarter earnings call on Thursday,
November 8 at 11:00 a.m., Eastern Time. A live webcast will be available at
www.urscorp.com/investor.
About
URS
URS
Corporation offers a comprehensive range of professional planning and design,
systems engineering and technical assistance, program and construction
management, and operations and maintenance services for transportation,
facilities, environmental, water/wastewater, industrial infrastructure and
process, homeland security, installations and logistics, and defense systems.
Headquartered in San Francisco, the Company operates in more than 20 countries
with approximately 30,400 employees providing engineering and technical services
to federal, state and local governmental agencies as well as private clients
in
the chemical, pharmaceutical, oil and gas, power, manufacturing, mining and
forest products industries (
www.urscorp.com
).
About
Washington Group
Washington
Group International provides the talent, innovation, and proven performance
to
deliver integrated engineering, construction, and management solutions for
businesses and governments worldwide. Headquartered in Boise, Idaho, with
approximately $4 billion in annual revenue, the company has approximately 25,000
people at work around the world providing solutions in power, environmental
management, defense, oil and gas processing, mining, industrial facilities,
transportation and water resources. For more information, visit
www.wgint.com.
Forward-Looking
Statements
Statements
contained in this press release that are not historical facts may constitute
forward-looking statements, including statements relating to timing of and
satisfaction of conditions to the merger, whether any of the anticipated
benefits of the merger will be realized, including future revenues, future
net
income, future cash flows, future competitive positioning and business
synergies, future acquisition cost savings, future expectations that the merger
will be accretive to GAAP and cash earnings per share, future market demand,
future benefits to stockholders, future debt payments and future economic and
industry conditions. Words such as “expect,” “estimate,” “project,” “budget,”
“forecast,” “anticipate,” “intend,” “expect,” “plan,” “may,” “will,” “could,”
“should,” “believe,” “predict,” “potential,” “continue” and similar expressions
are also intended to identify forward-looking statements. The companies believe
that their expectations are reasonable and are based on reasonable assumptions.
However, such forward-looking statements by their nature involve risks and
uncertainties that could cause actual results to differ materially from the
results predicted or implied by the forward-looking statement. The potential
risks and uncertainties include, but are not limited to: potential difficulties
that may be encountered in integrating the merged businesses; potential
uncertainties regarding market acceptance of the combined company; uncertainties
as to the timing of the merger, approval of the transaction by the stockholders
of the companies and the satisfaction of other closing conditions to the
transaction, including the receipt of regulatory approvals; competitive
responses to the merger; an economic downturn; changes in the each company’s
book of business; each company’s compliance with government contract procurement
regulations; each company’s ability to procure government contracts; each
company’s reliance on government appropriations; the ability of the government
to unilaterally terminate either company’s contracts; each company’s ability to
make accurate estimates and control costs; each company’s ability to win or
renew contracts; each company’s and its partners’ ability to bid on, win,
perform and renew contracts and projects; environmental issues and liabilities;
liabilities for pending and future litigation; the impact of changes in laws
and
regulations; a decline in defense spending; industry competition; each company’s
ability to attract and retain key individuals; employee, agent or partner
misconduct; risks associated with changes in equity-based compensation
requirements; each company’s leveraged position and ability to service its debt;
risks associated with international operations; business activities in high
security risk countries; third party software risks; terrorist and natural
disaster risks; each company’s relationships with its labor unions; each
company’s ability to protect its intellectual property rights; anti-takeover
risks and other factors discussed more fully in URS’ Form 10-Q for its quarter
ended June 29, 2007, Washington Group’s Form 10-Q for its quarter ended
September 28, 2007, as well as in the Joint Proxy Statement/Prospectus of URS
and Washington Group to be filed, and other reports subsequently filed from
time
to time, with the Securities and Exchange Commission. These forward-looking
statements represent only URS’ and Washington Group’s current intentions,
beliefs or expectations, and any forward-looking statement speaks only as of
the
date on which it was made. Neither URS nor Washington Group assumes any
obligation to update any forward-looking statements.
Additional
Information and Where to Find It
In
connection with the proposed transaction, URS and Washington Group filed a
definitive joint proxy statement/prospectus with the Securities and Exchange
Commission on October 1, 2007
and
will file supplemental materials with the SEC. Investors and security holders
are urged to read the definitive joint proxy/prospectus and the supplemental
materials because they contain important information about the proposed
transaction. Investors and security holders may obtain free copies of this
document and other documents filed with the SEC at the SEC's web site at
www.sec.gov
.
In
addition, investors and security holders may obtain free copies of the documents
filed with the SEC by URS by contacting URS Investor Relations at 877-877-8970.
Investors and security holders may obtain free copies of the documents filed
with the SEC by Washington Group by contacting Washington Group Investor
Relations at 866-964-4636. In addition, you may also find information about
the
merger transaction at
www.urs-wng.com
.
URS,
Washington Group and their directors and executive officers may be deemed
participants in the solicitation of proxies from the stockholders of URS and
Washington Group in connection with the proposed transaction. Information
regarding the special interests of these directors and executive officers in
the
proposed transaction is included in the definitive joint proxy
statement/prospectus of URS and Washington Group described above. Additional
information regarding the directors and executive officers of URS is also
included in URS' proxy statement for its 2007 Annual Meeting of Stockholders,
which was filed with the SEC on April 18, 2007. Additional information
regarding the directors and executive officers of Washington Group is also
included in Washington Group's proxy statement for its 2007 Annual Meeting
of
Stockholders, which was filed with the SEC on April 17, 2007, as amended.
These documents are available free of charge at the SEC's web site at
www.sec.gov
and
from Investor Relations at URS and Washington Group as described above.
#
#
#
Contacts
:
URS
|
Washington
Group International
|
|
|
Investors
|
Investors
|
H.
Thomas Hicks
|
MacKenzie
Partners, Inc.
|
Vice
President
|
Daniel
Burch/Larry Dennedy
|
&
Chief Financial Officer
|
212-929-5500
|
415-774-2700
|
|
|
|
Media
|
Media
|
Sard
Verbinnen & Co
|
Laurie
Spiegelberg
|
Hugh
Burns/Jamie Tully
|
Vice
President of Corporate Communications
|
212-687-8080
|
208-386-5255
|
|
|
|
Kekst
& Co.
|
|
Adam
Weiner
|
|
212-521-4800
|
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