Wood Group (John) PLC Completion of Built Environment Consulting sale (1893A)
September 21 2022 - 9:26AM
UK Regulatory
TIDMWG.
RNS Number : 1893A
Wood Group (John) PLC
21 September 2022
Completion of Built Environment Consulting sale
21 September 2022
John Wood Group PLC ('Wood' or 'the Group') is pleased to
announce that it has completed the sale of its Built Environment
consulting business ('Built Environment Consulting') to WSP Global
Inc. ('WSP').
Details of the sale
The sale completed for an enterprise value of $ 1,801 million(1)
, representing an EV multiple of 16 times including expected
standalone costs.
Wood has received gross cash proceeds of $1,801 million which
has immediately reduced our net debt position. The net proceeds
from the sale are expected to be around $1,672 million after the
deduction of estimated tax and transaction costs.
$m
Gross proceeds 1,942
------
Working capital (141)
------
Gross cash proceeds 1,801
------
Estimated tax and transaction
costs (129)
------
Estimated net cash proceeds(2) 1,672
------
The estimated tax costs of c.$85 million will be paid over the
next year while the estimated transaction costs of c.$44 million
will be paid in this financial year, with around $10 million
already paid in the first half of the year.
Use of proceeds
The completion of this transaction has reduced the Group's net
debt and has restored our financial flexibility. We are currently
exploring our capital allocation options, with a particular focus
on options that will improve free cash flow generation.
The Group's target leverage is a ratio of net debt (excluding
leases) to adjusted EBITDA of 0.5 to 1.5 times over time. We expect
our leverage will remain within this target range after some
capital is applied to options for the use of proceeds.
Capital markets day
We will be holding a Capital Markets Day on 29th November 2022
to outline our updated strategy in detail.
Ken Gilmartin, CEO, said:
"We are very pleased to have completed the sale of our Built
Environment Consulting business to WSP. This transaction marks a
new chapter for Wood - the proceeds have transformed our balance
sheet and restored financial flexibility to the Group.
"Wood has an exciting future ahead as we capture growth
opportunities across the energy and materials markets. We are
developing our updated strategy and will outline more details,
including our approach to capital allocation, at our capital
markets day in November".
For further information:
Simon McGough, President, Investor
Relations +44 (0)7850 978 741
Kevin Smith, Citigate Dewe Rogerson +44 (0)7710 815 924
Holly Gillis, Citigate Dewe Rogerson +44 (0)7940 797 560
JP Morgan and Morgan Stanley acted as joint financial advisers
to Wood on this transaction.
JP Morgan
Richard Perelman, Alex Bruce +44 (0)20 7742 4000
Morgan Stanley
Tom Perry, Matthew Jarman +44 (0)207 425 8000
Notes
1. This compares to $1,810 million in the Circular issued on
7 July 2022. The difference of $9 million relates to the Built
Environment Consulting business in Saudi Arabia which will
complete at a later date.
2. This compares to $1,623 million in the Circular. The difference
relates to working capital movements.
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END
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