Wood Plc has agreed to sell its nuclear business for 250 million pounds ($302 million), as it cuts debt associated with the 2017 acquisition of Amec Foster Wheeler and a prolonged oil-price slump, Kallanish Energy reports.
The Scottish engineering and services business will sell the unit to a subsidiary of Jacobs Engineering Group. The deal is expected to close by March 31, 2020.
The sale would bring Wood close to its leverage target of roughly 1.5 times earnings, and allow it to focus on the growing parts of its business, including petrochemical plants, low-carbon energy and oil and gas exploration and production.
“It was a good business in itself, but it was actually quite stranded,” Wood CEO Robin Watson told Bloomberg. “It’s the only part of the business we had in nuclear” so it was less strategically important, he said.
Watson instead sees new opportunities as Wood’s oil industry clients recover from a slump in crude prices. The company reported a pick-up in activity in its upstream business, which helped it beat profit estimates in the first half, Bloomberg reported.
Wood is currently working on petrochemical facilities for a joint venture between ExxonMobil and Sabic Basic Industries Corp., Ineos Group Holdings Ltd., and a joint venture between Oman Oil Co. and Kuwait Petroleum International, among others.
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