Wood sells consulting business for $1.9bn

Aberdeen-based global engineering and consulting giant John Wood Group said it agreed to sell its Built Environment Consulting business to Canada’s WSP Global Inc. for gross proceeds of $1.9 billion.

The consulting business being sold helps companies and governments assess environmental risks.

“The primary and immediate use of the net cash proceeds from the transaction will be a reduction in the group’s net debt to strengthen our balance sheet and provide financial flexibility to deliver our strategy,” said Wood.

The Aberdeen company added: “Divestment provides enhanced financial flexibility which will allow the group to consider further options on the use of proceeds.

“These include measures to improve the future sustainable cash flow of the ongoing group through the removal of certain liabilities, investment to accelerate our strategy and shareholder returns, for example through the restoration of an ordinary dividend …

“Sale will significantly reduce the group’s leverage and help us accelerate our strategy to be a leader across energy security and sustainability …”

At December 31, 2021, Wood’s net debt was $1.4 billion.

Built Environment Consulting has over 100 offices predominantly in North America, with locations in the UK and elsewhere in Europe, and employs around 5,500 consultants and technicians.

For the year ended December 31, 2021, Built Environment Consulting had revenue of $1.236 billion, operating profit of $120 million, profit before tax of $112 million and adjusted EBITDA of $149 million.

Wood CEO Robin Watson said: “This transaction will deliver significant value for our shareholders and marks a new chapter for Wood.

“It enables us to move onto our next strategic phase with the financial flexibility to accelerate our strategy to capture the growth opportunities ahead across both energy security and sustainability.

“We are focused now on the steps to complete this deal and in further developing our strategy, which we will outline in detail at a capital markets day, when my successor as chief executive is in place.”

WSP Global CEO Alexandre L’Heureux said: “The addition of the Built Environment Consulting business will allow us to expand our Earth and Environment leadership across our key markets and geographies.”