Amentum's blueprint as a public company

Sometime in September, Amentum will complete its merger with Jacobs Solutions' federal-facing business units and become a publicly traded government services company after 11 months of planning.

"New Amentum" will open for business as a company with 53,000 employees across 80 countries on around $14 billion in annual revenue. We also now know Amentum will list on the New York Stock Exchange under the ticker symbol AMTM.

Here are some highlights of what else Amentum's senior executive team told investors at an Aug. 13 capital markets day presentation about this new company.

The vision

Analysts in attendance took some control of the microphone for the final session to ask Amentum's senior executive team questions about what was said and explained.

One sought to better understand where Amentum sees itself across an always-fragmented government services universe that has seen some companies gravitate toward different corners of the market.

"We see an identity that is built around engineering and technology; we do think that that's a differentiator and that this is about a total solution mindset – the ability to design, build, integrate and then support," Amentum's chief executive John Heller said in response. "Having both the engineering and the technology combined, I think, provides an identity for all the employees and for us as a business with our customer, they see us differently. They see us as capable at the front end when you think of the acquisition lifecycle, R&D (research-and-development) and science, and then design and integration down through to O&M (operations and maintenance)."

Which brings the discussion around Amentum to large enterprise contracts that task the awardee to do a little bit of everything in those work areas and phases. Amentum will also look to expand its cross-selling posture "right out of the gate" and lean heavily on both business' contract vehicle positions as part of that, Heller said.

Amentum will focus on those opportunities across five markets Heller called out as priorities: environment, space, intelligence, defense and civilian.

Government clients in each of those five are putting more emphasis on modernization and next-generation technologies as they keep moving faster and adversaries of the U.S. do as well.

Heller described Amentum's approach to technology as horizontal, through which the company will develop and offer solutions that can be applied across contracts and customers.

The approach

Enter Jill Bruning, Amentum's chief technology officer and the leader of how the company will look to do just that.

Bruning cited digital engineering, artificial intelligence and machine learning, cybersecurity, and smart infrastructure as the four main technical priorities for Amentum in its core markets.

Every tech discussion begins and ends with AI and ML these days, or so it seems. Bruning described Amentum as taking a "narrow AI approach," where the company works with trusted data to understand how it interacts with large language models and take down some of the risks.

Amentum has also established an internal sandbox environment for employees to work with generative AI. Bruning described this as a "safe playground to experiment with" the tools and how they could be part of the solution.

Regarding smart infrastructure, that theme harkens back to Amentum's pre-2020 parent AECOM and Jacobs. Both of those companies of course have long histories in engineering and construction.

For Amentum, one key leg of its smart infrastructure strategy is in intelligent asset management.

"What this really means is highly-sensored infrastructure that is giving you feedback that you can incorporate to be able to do more efficient and effective management," Bruning said.

The numbers

Everything shown here is on a pro forma basis to roll up both business' financial histories and outlooks. Chantilly, Virginia-headquartered Amentum's fiscal year runs from October to September.

Revenue:

• FY 2023 – $13.4 billion
• FY 2024 expected – $13.7 billion
• FY 2025 outlook – between $13.8 billion and $14.2 billion
• Goal through to FY 2028 – between 4 and 6% compound annual growth rate
• FY 2023 backlog – $47 billion

Profit (adjusted earnings before interest, taxes, depreciation and amortization):

• FY 2023 – $996 million
• FY 2024 expected – between $1.03 billion and $1.05 billion
• FY 2025 outlook – between $13.8 billion and $14.2 billion
• Goal through to FY 2028: between 4 and 6 % CAGR

Adjusted EBITDA margin:

• FY 2023 – 7.6%
• FY 2024 expected – 7.6%
• FY 2025 outlook – 8%
• Goal through to FY 2028 – between 8.5% and 9%

Underlying the profitability goals are what Amentum is looking to achieve on the cost synergy front in putting both of its big pieces together. The company's levers to pull there are the integrations of systems and tech infrastructure, consolidated operating structure and facility optimization initiatives.

The company estimates gross synergies of $125 million-to-$175 million and net synergies of $50 million-to-$70 million, with the goal of realizing half of them within 12 months of transaction closure and all of them within 24 months.

Amentum is also targeting a net debt leverage of 3 times adjusted EBITDA within 24 months of closure, down from the current radio of 4x. Investors use that metric to gauge a company's liquidity and ability to make further acquisitions.