Wood announces progress on
its strategic disposal programme with the sales of EthosEnergy and
CEC Controls for around $165M
John Wood Group PLC
LEI: 549300PLYY6I10B6S323
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28 August 2024
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This announcement contains inside
information
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John Wood Group PLC ('Wood' or 'the Group') has signed separate sales
agreements for the disposals of two businesses, which together are
expected to generate net proceeds of around $165 million in 2024,
including loan notes of up to $42 million.
As part of Wood's previously
announced disposal programme of non-core businesses, the Group has
signed deals for the sale of its stake in Ethos Energy Group
Limited ('EthosEnergy'), a joint venture focused on rotating
equipment, and CEC Controls Company Inc ('CEC Controls'), an
industrial and process control systems business, in the automotive
market. Combined, these two businesses contributed $41 million to
Wood's adjusted EBITDA in 2023.
Wood expects net cash proceeds of
around $125 million from these disposals when they complete, which
is expected to be later in 2024. In addition, Wood will be issued
loan notes by EthosEnergy which, on repayment around five years
after completion, will generate further proceeds of up to $42
million plus interest.
Jennifer Richmond, Wood's Chief
Strategy Officer, said:
"The sale of these two non-core businesses is further evidence
of progress of our strategy. We continue to review Wood's portfolio
in line with our strategic priorities to be selective in our
markets and capabilities and steadfast in our commitment to
simplify Wood and deliver greater cash
flexibility.
"There is a strong strategic fit between both these
companies and their buyers, and we are confident both businesses
will thrive under new ownership.
About EthosEnergy sale
Wood owns 51% of the EthosEnergy
joint venture with its partner, Siemens Energy AG. An agreement by
both parties has been reached to sell the complete business to
private equity firm, One Equity Partners L.P ('One Equity
Partners').
The consideration for the deal,
which is subject to anti-trust and
regulatory approvals, as well as other typical closing conditions,
includes loan notes that will be issued to Wood with a face value
of up to $42 million, plus interest, around five years after
completion.
Wood expects net cash proceeds of
around $95 million upon completion, expected by the end of 2024, as
well as repayment of its loan notes on maturity.
EthosEnergy currently employs
c.3,600 people globally and contributed $34 million of adjusted
EBITDA to Wood's results (per Wood definition) in 2023, with no
revenue recognised in Wood's results.
EthosEnergy is part of Wood's
Investment Services business unit.
About CEC Controls sale
Wood has entered into an agreement
to sell its equity in CEC Controls and its affiliated entity in
Mexico to SCIO Automation Group, for a cash consideration of $30
million. SCIO Automation Group is a Germany-based global industrial
automation company and the deal, which is subject to
approvals as well as other typical closing
conditions, is expected to close later in 2024.
CEC Controls employs c.220 people
globally and is headquartered in Michigan, USA. The business
generated $66 million of revenue and $6 million of adjusted EBITDA
in 2023.
CEC Controls is part of Wood's
Consulting business unit. Wood expects to generate net cash
proceeds of around $29 million upon completion, subject to working
capital adjustments.
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For
further information:
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Simon McGough, President, Investor
Relations
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+44 (0)7850 978 741
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Vikas Gujadhur, Senior Manager,
Investor Relations
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+44 (0)7855 987 399
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Alex Le May / Ariadna Peretz, FTI
Consulting
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+44 (0)20 3727 1340
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The person responsible for arranging
the release of this announcement on behalf of Wood is Michael
Rasmuson, Group General Counsel and Company Secretary.
