Wood Group to sell North American division for £81.5m

Troubled Wood Group is to sell off its North American transmission and distribution business in a 110 million US dollars (£81.5 million) deal.

The proposed sale of the division comes days after Wood revealed a Dubai-based suitor for the group had reduced its takeover offer.

Shares in the Aberdeen-headquartered engineering and energy services firm ticked higher on Friday morning after it revealed the planned disposal.

It is the latest move to trim the business as part of a plan to simplify its operations.

Bosses said the latest deal means Wood has significantly exceeded plans announced earlier this year to secure between 150 million dollars (£111 million) and 200 million dollars (£148 million) through sales.

Wood has agreed to sell the North American T&D operation, which employs around 250 people, to power solutions firm Qualus.

The division had revenues of 37.3 million dollars (£27.6 million) in 2023 and adjusted earnings worth 5 million dollars (£3.7 million).

The deal is expected to be completed in the third or fourth quarter of this year and will be used to help fund debt reduction at Wood.

Ken Gilmartin, chief executive of Wood, said: “We are pleased to announce continued progress of our non-core business disposal programme with the sale of North America T&D to Qualus, following a highly competitive sale process.

“This sale, along with the sale of Kelchner and the agreement to divest our interest in RWG, has led to approximately 275 million dollars of disposal proceeds agreed so far this year.

“We are now on track to exceed our previously announced target for disposal proceeds as we continue to simplify our portfolio.”

It comes days after Wood revealed its Dubai-based suitor Sidara cut its takeover proposal to £207.6 million, but said it would be prepared to accept the reduced price.

The firm said Sidara had confirmed over the weekend it was “committed to making an offer”, but that any formal bid would be at the lower price of 30p a share.