Wood moves ahead with sale of EthosEnergy, CEC Controls
UK-based Wood has signed agreements to sell two of its businesses, which are expected to generate net proceeds of approximately $165mn in 2024, including loan notes of up to $42mn, the company announced on August 28.
As part of Wood’s ongoing disposal programme of non-core assets, the group has finalised deals to sell its stake in Ethos Energy Group, a joint venture specializing in rotating equipment, and CEC Controls Company, a business focused on industrial and process control systems in the automotive sector. Together, these two businesses contributed $41mn to Wood’s adjusted EBITDA in 2023.
Wood anticipates receiving net cash proceeds of around $125mn from these sales, expected to close later in 2024. Additionally, Wood will receive loan notes from EthosEnergy, which could generate further proceeds of up to $42mn plus interest, upon repayment approximately five years after the transaction is completed.
Wood owns 51% of the EthosEnergy joint venture with its partner, Siemens Energy. The parties have agreed to sell the entire business to the private equity firm One Equity Partners. The transaction, subject to antitrust and regulatory approvals, as well as other customary closing conditions, includes loan notes to be issued to Wood with a face value of up to $42mn, plus interest, payable around five years after completion.
Wood expects net cash proceeds of approximately $95mn upon the transaction’s completion, which is anticipated by the end of 2024, along with the repayment of its loan notes upon maturity.
EthosEnergy, which currently employs about 3,600 people globally, contributed $34mn of adjusted EBITDA to Wood’s 2023 results, with no revenue recognized in Wood’s financial statements. EthosEnergy is part of Wood’s Investment Services business unit.
Wood has also agreed to sell its equity in CEC Controls and its affiliated entity in Mexico to SCIO Automation Group, a Germany-based global industrial automation company, for a cash consideration of $30mn. This transaction, which is subject to regulatory approvals and other typical closing conditions, is also expected to close later in 2024.
CEC Controls is part of Wood’s Consulting business unit, and Wood anticipates generating net cash proceeds of approximately $29mn upon completion, subject to working capital adjustments.