REG - Wood Group (John)PLC - Sales of EthosEnergy and CEC Controls

John WoodAnnouncement

28/08/2024 07:00

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RNS Number : 9636B  Wood Group (John) PLC  28 August 2024

 

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

 

 28 August 2024  This announcement contains inside information

 

 

 

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.

 

 For further information:
 Simon McGough, President, Investor Relations        +44 (0)7850 978 741
 Vikas Gujadhur, Senior Manager, Investor Relations  +44 (0)7855 987 399
 Alex Le May / Ariadna Peretz, FTI Consulting        +44 (0)20 3727 1340

 

The person responsible for arranging the release of this announcement on
behalf of Wood is Michael Rasmuson, Group General Counsel and Company
Secretary.

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