November
12, 2007
To
the
Stockholders of Washington Group International:
We
strongly encourage you to vote now “FOR” the proposed merger with URS
Corporation so that your votes can be counted at Washington Group’s Special
Meeting of Stockholders scheduled for this coming Thursday, November 15,
2007,
at 7 a.m. Mountain Time. The terms of the amended merger agreement provide
Washington Group stockholders a number of important benefits, and URS
Corporation has publicly stated that this represents its “best and final” offer.
These benefits include
·
|
superior
value to Washington Group stockholders, with the revised transaction
offering a significant increase in value over the original
transaction;
|
·
|
greater
flexibility to choose between cash and stock in exchange for your
shares;
|
·
|
a
higher level of equity ownership in the combined company;
and
|
·
|
a
unique opportunity to create a single-source provider well-positioned
in
important high-growth sectors through a full life cycle of planning,
engineering, construction, environmental management, and operations
and
maintenance services.
|
Based
on
the closing price of URS common stock on November 2, 2007, the consideration
is
valued at approximately $3.2 billion, or $97.89 per Washington Group share.
The
value of the consideration provided by the amended merger agreement is based
on
0.90 shares of URS common stock plus $43.80 in cash for each Washington Group
share. (Stockholders are advised to obtain a current quote for the prices
of URS
and Washington Group shares.)
Under
the
amended merger agreement, Washington Group stockholders can now elect to
receive
all cash, all stock, or a combination of cash and stock (subject to
proration).
If
stockholders approve the merger at the Special Meeting of Stockholders on
November 15, 2007, we expect the transaction to close shortly thereafter
and
stockholders to be able to receive the merger consideration by the end of
November.
Your
Board of Directors unanimously recommends that all of our stockholders vote
“FOR” the adoption of the merger agreement.
Please
consider these factors in deciding how you will vote:
·
|
Superior
value
:
The revised merger consideration represents a premium of approximately
8.5
percent over the original merger agreement’s transaction value on November
2, 2007, and, as of November 9, 2007, the value of the revised merger
consideration is an approximately 40 percent premium to the undisturbed
preannouncement trading price on May 25, 2007, the last trading day
before
the transaction was announced. The P/E multiple implied by the merger
consideration significantly exceeds the company’s historical P/E multiples
and the transaction EBITDA multiple represents the second-highest
EBITDA
multiple that would ever have been paid in the Engineering and
Construction sector.
|
·
|
Election
of cash/stock mix
:
Under the new terms, stockholders may also now elect to receive all
cash,
all stock, or a mix of cash and stock for their shares (subject to
proration), allowing them greater flexibility either to participate
in the
future of the combined company or to receive
cash.
|
·
|
Greater
equity participation
:
Washington Group stockholders would be able to participate meaningfully
in
the long-term benefits and growth prospects of the combined company
through an approximately 35 percent equity ownership. Your Board
believes
that the combined company is capable of creating more stockholder
value
than Washington Group could achieve on its
own.
|
·
|
Committed
support of Washington Group’s chairman
:
Dennis Washington, non-executive chairman of Washington Group’s Board of
Directors, along with the entire Board, strongly believes that the
proposed merger transaction provides superior value and serves the
best
interests of all Washington Group stockholders. Mr. Washington 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 percent of the currently 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, and the soonest the transaction could
close
would be late December.
|
·
|
Unique
strategic fit
:
Your Board believes that 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.
The
combined company will have leadership positions in key growth markets,
global scale, a broad set of service capabilities, a diverse business
portfolio, and a strong financial position. This combination would
also
provide Washington Group stockholders with a more diversified company
that
would be better positioned to insulate stockholders from industry
downturns.
|
In
recommending the amended merger transaction with URS, your Board of Directors
is
focusing on what it believes to be in the best interests of all Washington
Group
stockholders. This transaction, which is fully financed and has no financing
contingency, provides Washington Group stockholders with the choice of immediate
cash and/or URS stock (subject to proration), the benefits of a more efficiently
leveraged balance sheet, and substantial ownership in an exciting company
with
significant long-term growth potential.
Please
vote today in order to avoid the expense and delay associated with rescheduling
the special meeting to late December. Since approval of the merger requires
the
affirmative vote of the holders of at least a majority of the outstanding
shares
of Washington Group common stock, your vote is important, no matter how many
shares you own. Not voting has the same effect as voting against the proposed
merger.
Please
vote your shares by telephone or via the Internet by following the instructions
provided on your proxy card.
Additional
information regarding the proposed merger transaction can be found in the
joint
proxy statement/prospectus dated September 28, 2007, and in the supplemental
proxy materials dated November 5, 2007.
Stockholders
who have questions about the merger or need assistance in submitting their
proxies or voting their shares should contact Washington Group’s proxy
solicitor, MacKenzie Partners, Inc., by calling 800-322-2885 (toll-free)
or
212-929-5500 (collect) or via e-mail to
proxy@mackenziepartners.com.
We
urge
you to vote “FOR” adoption of the merger agreement today.
Thank
you
for your continued interest in the company.
Very
truly yours,
Stephen
G. Hanks
President
and Chief Executive Officer
Washington
Group International
About
the Company
Washington
Group International (NYSE: WNG) 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
This
news
release contains forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995, as amended, which are identified
by
the use of forward-looking terminology such as may, will, could, should,
expect,
anticipate, intend, plan, estimate, or continue or the negative thereof or
other
variations thereof. Each forward-looking statement, including, without
limitation, any financial guidance, speaks only as of the date on which it
is
made, and Washington Group undertakes no obligation to update any
forward-looking statement to reflect events or circumstances after the date
on
which it is made or to reflect the occurrence of anticipated or unanticipated
events or circumstances. The forward-looking statements are necessarily based
on
assumptions and estimates of management and are inherently subject to various
risks and uncertainties. Actual results may vary materially as a result of
changes or developments in social, economic, business, market, legal, and
regulatory circumstances or conditions, both domestically and globally, as
well
as due to actions by customers, clients, suppliers, business partners, or
government bodies. Performance is subject to numerous factors, including
demand
for new power generation and for modification of existing power facilities,
public sector funding, demand for extractive resources, capital spending
plans
of customers, and spending levels and priorities of the U.S. federal and
state
and other governments. Results may also vary as a result of difficulties
or
delays experienced in the execution of contracts or implementation of strategic
initiatives. Results may also be impacted by costs relating to the proposed
merger transaction with URS Corporation and the timing of such merger
transaction if it is approved by both companies’ stockholders. For additional
risks and uncertainties impacting the forward-looking statements contained
in
this news release, please see "Note Regarding Forward-Looking Information"
and
"Item 1A. Risk Factors" in Washington Group's annual report on Form 10-K
for
fiscal year 2006.
Additional
Information and Where to Find It
In
connection with the proposed transaction, URS and Washington Group International
filed a definitive joint proxy statement/prospectus, a supplement to the
definitive joint proxy statement/prospectus, and other materials with the
Securities and Exchange Commission (the “SEC”), and URS filed a registration
statement on Form S-4. Investors and security holders are urged to read the
definitive joint proxy statement/prospectus, the supplement, the registration
statement on Form S-4 and the other materials filed with the SEC as they
contain
important information about the proposed transaction. Investors and security
holders may obtain free copies of these documents 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 definitive
joint
proxy statement/prospectus 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:
Investors:
Executive
Vice President & Chief Financial Officer
George
H.
Juetten, 208-386-5698
Or
MacKenzie
Partners, Inc.
Dan
Burch
or Larry Dennedy, 212-929-5239
Media:
Vice
President of Corporate Communications
Laurie
Spiegelberg, 208-386-5255
Or
Kekst
& Co
Adam
Weiner, 212-521-4800