Energy services company John Wood Group has sold its industrial services business to technical services provider Kaefer for an initial cash consideration of around $104 million.
Wood said on Wednesday that the sale had included a further potential payment of up to $14 million pending achievement of agreed financial goals.
The divestment is another important step in Wood’s portfolio rationalization strategy and follows the planned sale of the company’s nuclear business, which was announced in August 2019 and is expected to complete in the first quarter of 2020.
According to the company, cash proceeds from the sale of both businesses will be used to reduce debt.
David Kemp, Wood’s chief financial officer, said: “The sale of our industrial services business is the latest divestment aimed at maintaining our strong balance sheet and achieving our target leverage.
“As our focus has moved towards building a premium, differentiated, and higher-margin business, the industrial services offering is no longer core to our strategy.
“However, it is an excellent fit with Kaefer who see a clear opportunity to grow the business further and extend its market share across new sectors and geographies.”
In a separate statement, Kaefer said that Wood’s business will become a wholly-owned subsidiary of the Kaefer Group.
It is planned to merge Kaefer Ltd and Wood’s industrial services business into one company that will operate as Kaefer all over the UK and Ireland.
Wood’s industrial services business employs approximately 2,000 people at 16 locations all over the UK and Ireland.