Wood Announces Strategic Divestments of Non-Core Businesses, Generating $165 Million in Proceeds

Wood Announces Strategic Divestments of Non-Core Businesses, Generating $165 Million in Proceeds

(IN BRIEF) Wood has signed agreements to sell two non-core businesses, Ethos Energy Group Limited and CEC Controls Company Inc, as part of its strategy to simplify operations and focus on core capabilities. These sales are expected to generate approximately $165 million in net proceeds in 2024. The sale of EthosEnergy to One Equity Partners will bring in around $95 million in cash, plus loan notes worth up to $42 million. The sale of CEC Controls to SCIO Automation Group is expected to generate $29 million in cash. Both transactions are set to close later in 2024.

(PRESS RELEASE) ABERDEEN, 29-Aug-2024 — /EuropaWire/ — In a strategic move to streamline its operations and focus on core capabilities, John Wood Group PLC (Wood) has signed agreements to sell two of its non-core businesses, expected to generate approximately $165 million in net proceeds in 2024. These sales are part of Wood’s ongoing effort to simplify its portfolio and increase financial flexibility.

The disposals include Wood’s stake in Ethos Energy Group Limited (EthosEnergy), a joint venture specializing in rotating equipment, and CEC Controls Company Inc (CEC Controls), a provider of industrial and process control systems primarily serving the automotive industry. Together, these businesses contributed $41 million to Wood’s adjusted EBITDA in 2023.

The sale of EthosEnergy, in which Wood holds a 51% stake, has been agreed with private equity firm One Equity Partners L.P. Upon completion, expected by the end of 2024, Wood anticipates receiving around $95 million in net cash proceeds, along with loan notes valued at up to $42 million, which will mature approximately five years post-completion.

The second divestment involves the sale of CEC Controls to SCIO Automation Group, a global industrial automation company based in Germany. This transaction is expected to generate $29 million in net cash proceeds for Wood, with the deal set to close later in 2024.

Jennifer Richmond, Chief Strategy Officer at Wood, emphasized that these sales align with the company’s strategic priorities, stating, “These divestments reflect our commitment to simplifying Wood’s portfolio and enhancing cash flexibility. Both EthosEnergy and CEC Controls are well-positioned to thrive under their new ownership.”

These transactions underscore Wood’s focus on optimizing its business operations while ensuring that non-core assets find strategic alignment with new owners capable of driving their growth.

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.

Media Contact:

press.office@woodgroup.com

SOURCE: John Wood Group PLC