Aberdeen-headquartered Wood has announced it is to sell two businesses in deals worth £125 million.
The group has signed an agreement for the sale of its majority stake in Aberdeen-based Ethos Energy, a joint venture with Siemens Energy AG that focuses on rotating equipment.
It will also sell its equity in CEC Controls, an American-based industrial and process control systems business in the automotive market.
Wood expects net cash proceeds of around £94m from both disposals when completed, which is expected to be later in 2024.
In addition, Wood will be issued loan notes by Ethos Energy which, on repayment around five years after completion, will generate further proceeds of up to £31m plus interest.
Combined, these two businesses contributed £30m to Wood’s earnings before interest, taxes, depreciation, and amortisation in 2023.
Confidence in the £125m deal
Speaking about the sales, 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.”
Half year loss recorded
Its plan to sell Ethos Energy, which employs 4,000 staff globally, to was first revealed in January this year.
Wood set up Ethos – a joint venture with German engineering giant Siemens, in 2014 – creating what was billed as a “gas turbines giant”.
An agreement by both parties has been reached to sell the complete business to private equity firm, One Equity Partners.
Wood’s sale of its 51% stake in the company is expected to bring net cash proceeds of around £72m.
Meanwhile, the sale of CEC Controls to SCIO Automation Group is expected to raise more than £22m.
The announcement of the sale comes just a week after Wood revealed it slumped to a £756m half year loss.
The firm said revenues of £2.1bn ($2.8bn) were down 5% in the six months to June 30.
The loss includes exceptional charges of £743m, including a £626m impairment charge and a £107m loss to exit contracts.
Despite the latest results chief executive Ken Gilmartin said it showed “continued progress”.
Wood is seeking to deliver annual savings of £45m from 2025 as part of a cost-cutting drive.
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