REG - Wood Group (John)PLC - Sale of RWG JV interest to Siemens Energy Global

John WoodAnnouncement

25/07/2025 07:15

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RNS Number : 5175S  Wood Group (John) PLC  25 July 2025

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INDIRECTLY IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A
VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

FOR IMMEDIATE RELEASE

 

25 July 2025

John Wood Group PLC ("Wood" or the "Company")

Sale of joint venture interest in RWG to Siemens Energy Global

 

Wood is pleased to announce that its wholly-owned subsidiary, JWG Investments
Limited ("JWG"), has reached an agreement to sell its 50 per cent. interest in
RWG (Repair & Overhauls) Limited ("RWG"), a provider of repair and
overhaul services to operators of industrial aero-derivative gas turbines in
the global oil and gas, power generation and marine propulsion industries, to
Siemens Energy Global GmbH & Co. KG ("Siemens Energy Global"), a
wholly-owned subsidiary of Siemens Energy AG ("Siemens Energy") and Wood's
joint venture partner, for a cash consideration of $135 million, subject to
closing adjustments(1) (the "Transaction").

 

Transaction highlights

 

·      Sale of Wood's 50 per cent. interest in RWG to Siemens Energy
Global for a cash consideration of $135 million, subject to closing
adjustments(1)

·      Consistent with Wood's previously announced disposal programme of
non-core businesses and contributes to the $150 million to $200 million
disposal proceeds targeted in 2025

·      Transaction is expected to complete in late-2025 or early-2026
and is conditional on the receipt of certain regulatory clearances

·      Proceeds will be used by Wood to reduce net debt

 

Ken Gilmartin, CEO of Wood, commented:

 

"The sale of RWG to our joint venture partner, Siemens Energy Global, is a
significant milestone. As previously announced, our disposal programme of
non-core businesses is part of our strategy to simplify Wood and help mitigate
the impact of negative free cash flow in the year. The sale will also ensure
continuity for the employees and customers of RWG."

 

Strategic rationale and benefits of the Transaction

 

As previously announced, Wood has continued to evaluate its portfolio of
businesses to identify those deemed to be non-core to the Company's strategy
and priorities for growth. RWG was identified as part of this process.

 

Furthermore, on 14 February 2025, Wood announced that it would target $150
million to $200 million of disposal proceeds in 2025 to help mitigate the
impact of negative free cash flow in the year.

 

The Transaction follows other disposals as part of Wood's strategy. In April
2025, Wood announced that it had signed a sales agreement for the disposal of
Kelchner Inc., a U.S. civil construction services business, for net cash
proceeds of approximately $30 million. This sale completed in April 2025. In
2024, Wood also announced the sale of its 51 per cent. stake in EthosEnergy
Limited ("EthosEnergy") and the sale of CEC Controls Company Inc.

 

The terms of the Transaction value RWG at 6.6 times adjusted EBIT and 7.8
times the cash contribution RWG makes to Wood(2). Crucially, the Transaction
provides Wood with cash proceeds and a simpler portfolio in line with the
Company's previously announced strategy.

 

On this basis, the Transaction is, in the opinion of the Board of Wood (the
"Board"), in the best interests of Wood and its shareholders as a whole.

 

Appendix 1 to this announcement contains a summary of the principal terms of
the Transaction.

 

Use of proceeds

 

Net proceeds from the Transaction will reduce Wood's net debt and shall be
retained for use within the Company for general corporate purposes.

 

Wood's accounting for RWG

 

Wood has a 50 per cent. economic interest in RWG and considers it to be a
joint arrangement in light of its shareholding position, therefore it has been
accounted for within Wood's statutory accounts using the equity method. Wood's
shareholding in RWG is reported as part of its Turbines joint ventures, within
its Investment Services business unit, which manages a number of legacy and
non-core activities.

 

For Wood's adjusted results, including the alternative performance measures of
adjusted EBITDA and adjusted EBIT, Wood includes the proportional contribution
of RWG in its published results for all key line items except revenue(3).
Included within this, Wood currently benefits from a management charge paid
from RWG to Wood of around $9 million per year (the "Management Charge").

 

Impact on Wood

 

Following completion of the Transaction, Wood will no longer account for its
shareholding in RWG, nor receive dividends or the Management Charge. However,
Wood will benefit from the receipt of the net cash proceeds arising from the
Transaction.

 

As previously announced, Wood is continuing to work with its auditor towards
the publication of Wood's audited accounts for the financial year ended 31
December 2024 ("FY24") (the "Audit"). It is anticipated that additional
information regarding the financial impact of the Transaction on Wood,
including the impact on Wood's earnings, assets and liabilities, will be
disclosed after the completion of the Audit(4). However, as RWG is managed
separately to Wood, no material impacts to the continuing business of Wood as
a result of the Transaction are expected.

 

Details of the risks to Wood as a result of the Transaction are set out in
Appendix II to this announcement.

 

Financial information

 

The financial information in this announcement has not been reviewed by the
Company's auditors.

 

The financial information of RWG included below is based on Wood's audited
financial statements for the financial year ended 31 December 2023 ("FY23").
Any financial information included within this announcement may therefore be
subject to change pending the conclusion of the Audit.

 

The balance sheet value of Wood's investment in RWG was $69.2 million as at 31
December 2023.  Wood's share of RWG's post-tax profits was $16.3 million for
FY23.(5) Wood received dividends from RWG of $8.1 million in 2023 and $9.4
million in 2024.

 

In FY23, RWG contributed $32.9 million of adjusted EBITDA to Wood's adjusted
results including $23.6 million of proportionally consolidated adjusted EBITDA
and $9.3 million from the Management Charge. RWG contributed $20.4 million of
adjusted EBIT in FY23 to Wood's adjusted results.

 

RWG's revenue in FY23 was $253.4 million, though this is not consolidated in
Wood's accounts.

 

Next steps

 

The Transaction is subject to customary conditions, including the receipt of
certain antitrust and other regulatory approvals (the "Conditions"), and is
expected to close in late-2025 or early-2026.

 

The long stop date for satisfaction of the Conditions (the "Long Stop Date")
is 25 January 2027. In the event that any of the Conditions are not satisfied
by the Long Stop Date, the Long Stop Date may be extended if both JWG and
Siemens Energy Global agree.

 

UKLRs

 

The Transaction constitutes a significant transaction for the purposes of
Chapter 7 of the UK Listing Rules made by the Financial Conduct Authority for
the purposes of Part VI of the Financial Services and Markets Act 2000 (as
amended) (the "UKLRs"). As such, this announcement is made in accordance with
Wood's disclosure obligations pursuant to Chapter 7 of the UKLRs.

 

About Wood

 

Wood is a global leader in consulting and engineering, delivering critical
solutions across energy and materials markets. Wood provides consulting,
projects and operations solutions in 60 countries, employing around 35,000
people.

 

About RWG

 

RWG is a provider of repair and overhaul services to operators of industrial
aero-derivative gas generators in the global oil and gas, power generation,
and marine propulsion industries. RWG's service capability covers SGT-A20
(Industrial Avon), SGT-A35 (Industrial RB211), SGT-A05 (Industrial 501),
Industrial and Marine Olympus gas generators, Marine Spey, Tyne and WR21 gas
turbines.

 

Enquiries

 

 Simon McGough, President, Investor Relations  +44 (0)7850 978 741
 Alex Le May / Ariadna Peretz, FTI Consulting  +44 (0)20 3727 1340

 

 

Slaughter and May is acting as Legal Adviser to Wood in connection with the
Transaction.

 

Notes

 

1.   The final amount of net proceeds will be subject to certain limited
retention arrangements and other customary completion adjustments by virtue of
the completion accounts process.

 

2.   Based on the Management Charge ($9.3 million in FY23) and the dividend
Wood receives from RWG ($8.1 million in FY23).

 

3.   Adjusted EBITDA is the Group's adjusted earnings before interest, tax,
depreciation and amortisation. Adjusted EBIT is the Group's adjusted EBITDA
after depreciation and amortisation. This measure excludes the amortisation of
acquired intangibles.

 

4.   The Company notes that the audited accounts of RWG for FY24 have been
published and are available for inspection on Companies House.

 

5.   RWG's post tax profit in FY24 was £24.65 million, of which Wood's has
a 50% share.

 

Important Notices

 

No statement in this announcement is intended as a profit forecast and no
statement in this announcement should be interpreted to mean that the future
earnings per share, profits, margins or cash flows of Wood following the
Transaction will necessarily match or be greater than the historical published
earnings per share, profits, margins or cash flows of Wood.

 

This announcement may include statements that are, or may be deemed to be,
"forward-looking statements". These forward-looking statements may be
identified by the use of forward-looking terminology, including the terms
"believes", "estimates", "plans", "projects", "anticipates", "expects",
"intends", "may", "will" or "should" or, in each case, their negative or other
variations or comparable terminology, or by discussions of strategy, plans,
objectives, goals, future events or intentions. Forward-looking statements may
and often do differ materially from actual results. Any forward-looking
statements reflect Wood's current view with respect to future events and are
subject to risks relating to future events and other risks, uncertainties and
assumptions relating to Wood's business, results of operations, financial
position, liquidity, prospects, growth and strategies. Forward-looking
statements speak only as of the date they are made.

 

You are advised to read this announcement in its entirety for a further
discussion of the factors that could affect Wood's future performance. In
light of these risks, uncertainties and assumptions, the events described in
the forward-looking statements in this announcement may not occur.

 

This announcement does not constitute and should not be construed as, an offer
to purchase or sell or issue securities, or otherwise constitute an
inducement, invitation, commitment, solicitation or recommendation to any
person to purchase, subscribe for, or otherwise acquire securities in Wood, or
constitute an inducement to enter into any investment activity in any
jurisdiction. Nothing contained in this announcement is intended to, nor shall
it, form the basis of, or be relied on in connection with, any contract or
commitment whatsoever and, in particular, must not be used in making any
investment decision.

 

The distribution of this announcement in or from certain jurisdictions may be
restricted or prohibited by the laws of any jurisdiction other than the UK.
Recipients of this announcement are required to inform themselves of, and
comply with, all restrictions or prohibitions in such other jurisdictions. Any
failure to comply with applicable requirements may constitute a violation of
the laws and/or regulations of such other jurisdictions.

 

This announcement has been prepared for the purposes of complying with the
applicable law and regulation of the UK (including the UKLRs and the
Disclosure Guidance and Transparency Rules) and the information disclosed may
not be the same as that which would have been disclosed if this announcement
had been prepared in accordance with the laws and regulations of any
jurisdiction outside of the UK.

 

Save as required by the Market Abuse Regulation, the Disclosure Guidance and
Transparency Rules, the UKLRs or by applicable law Wood expressly disclaims
any intention, obligation or undertaking to update, review or revise any of
the information or the conclusions contained herein, including forward-looking
or other statements contained in this announcement, or to correct any
inaccuracies which may become apparent whether as a result of new information,
future developments or otherwise.

 

 

 

Appendix I - Summary of the principal terms of the Transaction

 

Parties and structure

 

The Transaction is governed by the share purchase agreement (the "Share
Purchase Agreement") entered into between JWG and Siemens Energy Global on 25
July 2025. Pursuant to the Share Purchase Agreement and subject to the
Conditions (as defined below), JWG has agreed to sell and Siemens Energy
Global has agreed to purchase the 501,027 B ordinary shares of £1.00 each in
the share capital of RWG (representing JWG's entire shareholding in RWG, being
50% of the issued share capital of RWG) (the "Sale Shares"). Following
completion under the Share Purchase Agreement ("Completion"), RWG will become
a wholly-owned subsidiary of Siemens Energy Global.

 

Conditions

 

Completion of the Transaction is conditional upon satisfaction of the
Conditions. The Long Stop Date is 25 January 2027. In the event that any of
the Conditions are not satisfied by the Long Stop Date, the Long Stop Date may
be extended if both JWG and Siemens Energy Global agree.

 

Consideration

 

The total consideration for the Sale Shares is $135 million. The final amount
of cash proceeds will be subject to certain limited retention arrangements and
other customary completion adjustments by virtue of the completion accounts
process (the "Consideration").

 

Warranties and indemnities

 

Given the nature of the Transaction, JWG has given to Siemens Energy Global
limited business warranties and customary fundamental warranties (the "JWG
Warranties"), each of which shall be repeated at Completion. Siemens Energy
Global has also given to JWG customary fundamental warranties, each of which
shall be repeated at Completion.

 

JWG has given a specific indemnity in favour of Siemens Energy Global in
respect of limited potential environmental liabilities that the RWG group may
incur following Completion. The indemnity is subject to customary limitations
with regards quantum and time period. The indemnity is not material in the
context of Wood and its subsidiaries (the "Wood Group").

 

Limitations on liability

 

Claims under the Share Purchase Agreement are subject to customary financial
and other limitations of liability.

 

Restrictive covenants

 

Wood has agreed to non-solicitation and non-compete obligations in favour of
the Siemens Energy Global group for a period of two years following
Completion.

 

Obligations prior to Completion

 

Prior to Completion, RWG has agreed not to take certain actions which reflect
the existing restrictions and governance arrangements contemplated by the
joint venture agreement.

 

Confidentiality restrictions

 

Wood and Siemens Energy have agreed to certain customary confidentiality
restrictions.

 

Tax covenant

 

JWG has given a tax covenant in favour of Siemens Energy Global in relation to
a proportion of taxation in respect of the periods prior to Completion,
subject to usual exclusions for a transaction of this nature.

 

Termination

 

The Share Purchase Agreement may be terminated by either party if any of the
Conditions are not waived or satisfied on or before the Long Stop Date,
subject to, in the case of termination by Siemens Energy Global, Siemens
Energy Global having complied in all respects with its obligations under the
Share Purchase Agreement relating to the satisfaction of the Conditions.

 

If either party fails to perform any of their respective obligations to
deliver certain customary documents or, in the case of Siemens Energy Global,
make payment of the Consideration on Completion, the non-defaulting party may,
in its absolute discretion, terminate the Share Purchase Agreement.

 

In addition, Siemens Energy Global may terminate the Share Purchase Agreement
on notice in writing to JWG if any matter, fact or circumstance exists comes
to Siemens Energy Global's notice prior to Completion which: (i) constitutes
an insolvency event in respect of JWG; or (ii) would constitute a breach of
the JWG Warranties at Closing by reference to the facts and circumstances then
existing and such breach has not been remedied to Siemens Energy Global's
satisfaction within 10 business days of JWG's receipt of such notice.

 

Governing law and jurisdiction

 

The Share Purchase Agreement is governed by and shall be construed in
accordance with the laws of England and Wales. All disputes arising out of or
in connection with the Share Purchase Agreement will be settled by arbitration
according to the Rules of Arbitration of the Internal Chambers of Commerce.
The seat of arbitration shall be London.

 

Appendix II - Risk Factors

 

Shareholders of Wood ("Shareholders") should carefully consider, together with
all other information contained in this announcement, the specific factors and
risks described below. Wood considers these to be the known material risk
factors relating to the Transaction for Shareholders to consider. There may
be other risks of which the Board is not aware or which it believes to be
immaterial which may, in the future, be connected to the Transaction and have
a material and adverse effect on the business, financial condition, results of
operations or future prospects of the Wood Group. The risks described below
are only those which: (i) are material risk factors relating to the
Transaction; or (ii) will be material new risk factors to the Wood Group as a
result of the Transaction. Note that the risk factors are set out in order of
materiality within each section.

 

1.   Risks relating to the Transaction

 

(i)         The Transaction may not proceed to Completion

 

Pursuant to the Share Purchase Agreement, Completion of the Transaction is
subject to, among other things, the consent of the relevant antitrust and
other regulatory authorities. There can be no assurance that the Conditions
will be satisfied or waived and, accordingly, that Completion of the
Transaction will take place.

 

If Completion of the Transaction does not occur, the Wood Group will not
receive the Consideration from the Transaction. Further, some other costs
incurred by the Wood Group in connection with the Transaction (such as legal
and other advisory fees) would be incurred without the receipt of those cash
proceeds.

 

If the Transaction does not proceed to Completion, there can be no guarantee
that Wood will be able to secure another transaction involving the Sale Shares
on terms more favourable than, or equivalent to, the Transaction.

 

(ii)        Exposure to liabilities and restrictions under the Share
Purchase Agreement

 

The Share Purchase Agreement contains obligations in the form of warranties,
certain pre-Completion undertakings and a number of customary post-Completion
restrictive covenants in favour of Siemens Energy Global. The Wood Group has
taken steps to minimise the risk of liability through customary limitations on
liability and sought to ensure that the restrictive covenants will not impact
the Wood Group's business as currently carried out. However, the limitations
of liability will not apply in all scenarios and any liability to make a
payment arising from a successful claim by Siemens Energy Global under the
Share Purchase Agreement could reduce the Consideration and have an adverse
effect on Wood's business, results of operations, prospect and financial
condition. Similarly, restrictive covenants applicable to Wood could also have
an adverse effect on its ability to pursue future opportunities and therefore
its business, results of operations, prospects and financial condition.

 

2.   Material new risk factors to the Wood Group as a result of the
Transaction

 

(i)         Financial risks for the Wood Group in relation to its exit
from the joint venture alongside Siemens Energy Global

 

The Wood Group will forgo future returns from the joint venture, to the extent
such returns were available and this may adversely affect the Wood Group's
business and its results. As set out in the 'Financial information' section,
Wood's share of RWG's post-tax profit was $16.3 million for FY23. In FY23 RWG
contributed $32.9 million of adjusted EBITDA to Wood's adjusted results
including $23.6 million of proportionality consolidated adjusted EBITDA and
$9.3 million from the Management Charge. RWG contributed $20.4 million of
adjusted EBIT in FY23 to Wood's adjusted results.

 

(ii)        The Wood Group's operations will be less diversified and
more susceptible to specific risks

 

Following the Transaction, the Wood Group's business will be smaller and less
diversified. Without the benefit of the contribution of profits of its
shareholding in RWG, the Wood Group's profits will be lower and its overall
financial performance will depend more on the performance of each of its
continuing operations and the success of its business strategy. In particular,
any underperformance by any business or division within the Wood Group will
have a larger impact on the Wood Group than would have been the case before
the Transaction.

 

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