URS to use new debt, existing loan for $1.25 billion Flint acquisition

By Aleesia Forni

Columbus, Ohio, Feb. 21 - URS Corp. and Flint Energy Services Ltd. have entered into a definitive agreement under which URS will acquire Flint for $1.25 billion in cash, and URS expects permanent financing to consist of borrowings under its existing credit facility and new debt.

The company has a commitment for a new bridge facility and intends to use its "strong" cash flows to reduce its debt quickly, while continuing to invest in the business.

"As we've done in the past, we will back down from discretionary expenditures. We'll focus our cash flow first, obviously, on supporting the organic growth of the company, but right behind that we'll be paying down the debt aggressively, which you've seen us do several times," chief financial officer H. Thomas Hicks said during the company's conference call to announce the transaction.

Chief executive officer Martin M. Koffel said the company becomes "absolute demons" about paying down debt once it has completed a transaction.

"We take on the debt [for acquisitions], then it's sort of like we hate the debt," Koffel added.

Because of this, URS will be "all about de-levering" in order to give the company the freedom to participate in future acquisitions if an attractive opportunity presents itself.

The transaction is expected to close in the second quarter of 2012, and URS will assume roughly $225 million in Flint debt.

The company has had in place "for quite a while" a share repurchase program under which UBS would repurchase roughly the same number of shares it issues under its benefit programs.

"We expect that to continue," Hicks said. "It's a relatively modest program. The discretionary buybacks would be curtailed until we're further into integration and debt pay down."

URS is a San Francisco-based provider of engineering, construction, maintenance and technical services for public and private customers.

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