REG - Wood Group (John)PLC - Sale of North America T&D to Qualus

John WoodAnnouncement

Today 07:00

For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250829:nRSc1604Xa&default-theme=true

RNS Number : 1604X  Wood Group (John) PLC  29 August 2025

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, DIRECTLY OR
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

 

29 August
2025

 

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

Sale of North America T&D to Qualus

 

Wood is pleased to announce that it has reached an agreement to sell its North
American Transmission & Distribution engineering business ("North America
T&D") to Qualus LLC and 2737813 ALBERTA LTD (together, "Qualus"), for cash
consideration of $110 million, subject to customary closing adjustments(1)
(the "Transaction").

 

North America T&D is a provider of comprehensive power infrastructure
engineering for substations, transmission, distribution and renewable
generation across Canada and the USA. Qualus is a leading pure-play power
solutions firm and innovator at the forefront of power infrastructure
transformation, with differentiated capabilities across grid modernization,
resiliency, security, and sustainability.

 

Transaction highlights

 

·   Sale of North America T&D to Qualus for a cash consideration of
$110 million, subject to customary closing adjustments(1)

·    Follows a highly competitive auction process, valuing North America
T&D at 14.9 times adjusted EBITDA(2,3)

·     Consistent with Wood's previously announced disposal programme of
non-core businesses

·    Contributes to a total of approximately $275 million of disposal
proceeds agreed so far in 2025(4), ahead of the previously announced $150
million to $200 million targeted for this year

·    Expected to complete in the third or fourth quarter of 2025

·    Proceeds will be used by Wood to reduce net debt and retained for
general corporate purposes

 

Ken Gilmartin, CEO of Wood, commented:

 

"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 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."

 

Strategic rationale and benefits of the Transaction

 

As previously announced, Wood has continued to evaluate its portfolio of
businesses to identify those which are non-core to the Company's strategy and
growth priorities. North America T&D 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 two other disposals announced in 2025, bringing the
total expected disposal proceeds agreed so far in 2025 to approximately $275
million(4).

 

The Transaction follows a highly competitive auction process, with the terms
of the Transaction valuing North America T&D at 14.9 times adjusted
EBITDA(2,3). The Transaction provides Wood with cash proceeds and a simpler
portfolio in line with the Company's previously announced strategy.

 

The Board of Wood (the "Board") considers that the Transaction is 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 general corporate purposes.

 

Impact on Wood

 

Following closing of the Transaction, Wood will no longer receive the
contribution that North America T&D currently makes to the Company's
financial results. However, Wood will benefit from the receipt of the net cash
proceeds from the Transaction.

 

As previously announced, Wood is continuing to work with its auditor towards
the publication of its audited accounts for the financial year ended 31
December 2024 (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.

 

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 North America T&D 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.

 

North America T&D operates within Wood's Projects business unit. The
estimated total assets of North America T&D were $12.3 million as at 31
December 2023. In FY23, North America T&D generated revenue of $37.3
million, adjusted EBITDA(3) of $5.0 million and adjusted EBIT(5) of $3.9
million.

 

Next steps

 

The Transaction is subject to the satisfaction of customary conditions and
Wood having complied with its obligations under UKLR 7.3 in connection with
the Transaction following completion and publication of the Audit (the "RNS
Condition") (together, the "Conditions"). The Transaction is expected to close
in the third or fourth quarter of 2025.

 

The deadline for satisfaction of the RNS Condition is 31 October 2025 and the
deadline for satisfaction of all other conditions is 31 December 2025 (the
"Closing Deadline").

 

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 around 60 countries, employing around
35,000 people.

 

About North America T&D

 

North America T&D is a provider of comprehensive engineering expertise in
power infrastructure across substations, transmission, distribution and
renewable generation across Canada and the USA. It employs around 250 people.

 

About Qualus

 

Qualus is a leading pure-play power solutions firm and innovator at the
forefront of power infrastructure transformation, with differentiated
capabilities across grid modernization, resiliency, security, and
sustainability. The firm partners with utilities, commercial, industrial, data
centre, and government clients, and renewable and energy storage developers,
offering comprehensive solutions through boutique and integrated advisory,
planning, engineering, digital solutions, program management, and specialised
field services. Qualus also provides software and technology enabled services
and develops breakthrough solutions for critical power industry challenges
such as distributed and variable resource integration, emergency management,
and secure data exchange. The firm has over 1,600 professionals, with offices
throughout the U.S. and Canada.

 

The person responsible for arranging the release of this Announcement on
behalf of Wood is John Habgood, Group General Counsel and Company Secretary.

 

Enquiries

 

Simon McGough, President, Investor Relations               +44
(0)7850 978 741

Alex Le May / Ariadna Peretz, FTI Consulting
+44 (0)20 3727 1340

 

Notes

 

1.   The final amount of net proceeds will be subject to customary closing
adjustments by virtue of the closing accounts process and deal associated
costs.

 

2.   Based on North America T&D's 2025 forecasted results for the
financial year ending 31 December 2025 on a standalone basis, i.e., excluding
the Wood group's (the "Wood Group") allocated costs.

 

3.    Adjusted EBITDA is adjusted earnings before interest, tax,
depreciation and amortisation.

 

4.   Includes $135 million cash consideration from the sale of Wood's
interest in RWG (subject to completion adjustments, expected to complete in
late-2025 or early-2026) and $30 million from the completed sale of Kelchner
Inc.

 

5.   Adjusted EBIT is adjusted EBITDA after depreciation and amortisation.
This measure excludes the amortisation of acquired intangibles.

 

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 equity purchase agreement (the "Equity
Purchase Agreement") entered into between Wood Group USA, Inc., Wood UK
Limited (the "Sellers"), Qualus LLC and 2737813 ALBERTA LTD (together, the
"Buyers"), Wood T&D USA, Inc. and Wood T&D Canada Holding Ltd. (each a
"Target Company" and together, the "Target Companies") on 28 August 2025.
Pursuant to the Equity Purchase Agreement, the Sellers have agreed to sell,
and the Buyers have agreed to purchase, all of the issued and outstanding
equity (the "Sale Equity") of the Target Companies.

 

Conditions

 

Closing of the Transaction ("Closing") is conditional upon satisfaction of the
Conditions, as described above.

 

Consideration

 

The cash consideration for the Sale Equity is $110 million. The final amount
of cash proceeds will be subject to customary closing adjustments by virtue of
the closing accounts process and deal associated costs (the "Consideration").

 

Representations and warranties and indemnity

 

The Sellers have jointly and severally given the Buyers customary fundamental
representations and warranties. The Sellers and the Target Companies have
jointly and severally given the Buyers customary fundamental warranties and
certain business representations and warranties in respect of the Target
Companies. The Buyers have also jointly and severally given the Sellers and
the Target Companies customary fundamental representations and warranties.

 

Except in the event of fraud, breaches of representations and warranties given
by the Sellers and the Target Companies are covered exclusively by
representations and warranties insurance (the "R&W Insurance") obtained by
the Buyers.

 

The Sellers have given a specific indemnity in favour of the Target Companies
and members of their group (the "Indemnitees") in respect of a limited
potential litigation liability (the "Indemnified Matter") that the Indemnitees
may incur following Closing. If the Indemnified Matter is not resolved prior
to Closing, the Buyers will withhold an agreed amount which shall be deposited
into in the Escrow Account (as defined below) on Closing and held in
accordance with the terms of the Escrow Agreement (as defined below) (an
"Additional Escrow Amount"). The indemnity is subject to customary limitations
with regards quantum and time period. The indemnity is not material in the
context of the Wood Group.

 

Restrictive covenants

 

The Sellers have agreed to non-compete and non-solicitation obligations in
favour of North America T&D for a period of five years following Closing
(the "Restricted Period"), subject to customary exceptions. The Sellers have
also agreed to a non-disparagement obligation in favour of the Buyers and
North America T&D during the Restricted Period.

 

Confidentiality restrictions

 

The Sellers have agreed to certain customary confidentiality restrictions.

 

Termination

 

Termination of the Equity Purchase Agreement may be triggered: (i) by either
the Sellers or the Buyers if the Conditions (other than the RNS Condition) are
not satisfied or cannot practically be satisfied by the Closing Deadline; (ii)
by either the Sellers or the Buyers if there has been a material breach,
inaccuracy or failure to perform any representation, warranty, covenant or
agreement; (iii) by the Buyers or the Sellers in the event that:
(a) consummation of the Transaction would be illegal or prohibited; or
(b) any governmental authority issues an order restraining or enjoining the
Transaction, and such order has become final and non-appealable; (iv) by the
Buyers if the RNS Condition is not, or cannot be, satisfied by 31 October
2025; or (v) by mutual agreement.

 

Governing law and jurisdiction

 

The Equity Purchase Agreement is governed by Delaware law. All disputes
arising out of or in connection with the Equity Purchase Agreement will be
settled by arbitration according to the Rules of the American Arbitration
Association in New York.

 

Escrow Agreement

 

Prior to Closing, an escrow agreement will be entered into between Qualus LLC,
the Sellers and CIBC National Trust Company (the "Escrow Agreement"). Pursuant
to the Escrow Agreement, Qualus LLC will pay an amount of $1.75m into an
escrow account (the "Escrow Account") at Closing to be held pursuant to the
terms of the Escrow Agreement and released to the Sellers five business days
subject to final determination of any post-Closing adjustments. As noted
above, an Additional Escrow Amount may also be deposited in the Escrow Account
on Closing.

 

Transition Services Agreement

 

Prior to Closing, a transition services agreement will be entered into between
the Target Companies, Wood Group USA, Inc. and Wood Group Canada Limited (the
"Service Providers") and the Buyers (the "Transition Services Agreement"). In
accordance with the terms of the Transition Services Agreement, the Service
Providers have agreed to provide IT, benefits and 401K transition support
services to North America T&D until 31 December 2025 or as otherwise
agreed in the Transition Services Agreement. The Buyers are able to extend the
duration of the Transition Services Agreement for a further 30 days on up to
two occasions.

 

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 Closing

 

Pursuant to the Equity Purchase Agreement, Closing of the Transaction is
subject to, among other things, customary consents. There can be no assurance
that the Conditions will be satisfied or waived and, accordingly, that Closing
of the Transaction will take place.

 

If Closing of the Transaction does not occur, Wood will not receive the
Consideration from the Transaction. Further, some other costs incurred by Wood
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 Closing, there can be no guarantee that
Wood will be able to secure another transaction involving the Sale Equity on
terms more favourable than, or equivalent to, the Transaction.

 

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

 

The Equity Purchase Agreement contains obligations in the form of
representations and warranties, certain pre-Closing undertakings and a number
of customary post-Closing restrictive covenants in favour of Qualus. The Wood
Group has taken steps to minimise the risk of liability through the R&W
Insurance and sought to ensure that the restrictive covenants will not impact
the Wood Group's business as currently carried out. The R&W Insurance will
not apply in the event of fraud. 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 the
disposal of North America T&D

 

The Wood Group will forgo the future financial contribution of North America
T&D and this may adversely affect the Wood Group's business and its
results. As set out in the 'Financial information' section, the gross assets
of North America T&D were $12.3 million for FY23. In FY23 North America
T&D contributed revenue of approximately $37.3 million, adjusted EBITDA(3)
of $5.0 million and adjusted EBIT(5) of $3.9 million 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 North
America T&D, 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.

 

 

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  DISFKLBLEVLLBBK