28th Aug 2024 09:01
(Alliance News) - John Wood Group PLC on Wednesday said it has signed for the sale of its stake in Ethos Energy Group Ltd and CEC Controls Co Inc.
John Wood is an Aberdeen-based oilfield and engineering services firm. Its shares were up 2.4% to 136.66 pence each in London on Wednesday morning.
Ethos Energy is a joint venture focused on rotating equipment, and CEC Controls is an industrial and process control systems business, in the automotive market.
John Wood has signed separate sales agreements for the sale of the two businesses, which together are expected to generate net proceeds of around USD165 million this year, including loan notes of up to USD42 million.
Combined, these two businesses contributed USD41 million to Wood's adjusted earnings before interest, tax, depreciation, and amortisation in 2023.
Wood expects net cash proceeds of around USD125 million from the disposals. This will be received on completion, which is expected to be later in the year.
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 USD42 million plus interest.
It explained that this part of its disposal programme of non-core businesses.
"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," said Wood's Chief Strategy Officer Jennifer Richmond.
"There is a strong strategic fit between both these companies and their buyers, and we are confident both businesses will thrive under new ownership."
By Sophie Rose, Alliance News senior reporter
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