Shares of Aberdeen-based global engineering and consulting giant John Wood Group rose as much as 8% on Wednesday as it announced it completed the sale of its Built Environment consulting business to Canada’s WSP Global Inc for gross proceeds of $1.942 billion.

“The sale completed for an enterprise value of $1,801 million, representing an EV multiple of 16 times including expected standalone costs,” said Wood.

“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.

“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 …

“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.”

John Wood Group CEO Ken Gilmartin 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”.