Wood announces progress on its strategic disposal programme with the sales of EthosEnergy and CEC Controls

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.