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Wood to Sell Industrial Services Business  | Rigzone

Wood to Sell Industrial Services Business  | Rigzone

Wood has announced the sale of its industrial services business to technical services provider, Kaefer, for an initial cash consideration of around $104 million and a further potential payment of up to approximately $14 million.

The divestment was described as “another important step in Wood’s portfolio rationalization strategy”. It 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 this year. Cash proceeds from the disposals will be used to reduce debt, according to Wood.

Kaefer revealed that plans are in place 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, Kaefer highlighted. Kaefer says it cur­rently has 12 of­fice loc­a­tions across the UK, em­ploy­ing ap­prox­im­ately 1,200 people.

“The sale of our industrial services business is the latest divestment aimed at maintaining our strong balance sheet and achieving our target leverage,” David Kemp, Wood’s chief financial officer, said in a company statement.

“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,” he added.

Steen E. Hansen, Co-CEO at Kaefer, said, “our cli­ents will con­tinue to re­ceive the same high-qual­ity ser­vice they have come to ex­pect plus the ex­tra value offered by both com­pan­ies work­ing to­gether”.

“Wood’s in­dus­trial ser­vices busi­ness and Kaefer work in dif­fer­ent, yet re­lated in­dus­tries, which is why they com­ple­ment one an­other so well,” he added.

Wood’s industrial services business provides integrity and fabric maintenance for assets in the marine, process energy, offshore oil and gas and infrastructure sectors across the UK and Ireland.

In its latest results statement, Wood revealed that better than anticipated cash generation in the second half of last year delivered a reduction in net debt to below $1.5 billion as of December 31, 2019.

Kaefer in the UK serves a vast and grow­ing range of in­dus­tries with as­set in­teg­rity ser­vices, in­clud­ing ac­cess solu­tions, in­su­la­tion, in­spec­tion and test­ing, pro­tect­ive coat­ings and as­bes­tos man­age­ment, according to the company’s website.

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