(Bloomberg) -- John Wood Group Plc agreed to sell its built-environment consulting business to WSP Global Inc. for gross proceeds of about $1.9 billion.
Scottish engineering group Wood will use the money to reduce debt, it said in a statement. The firm had indicated back in January that a process was under way to sell the unit, which helps governments and companies measure environmental risks. Such deals have gathered pace as an increased investor focus on sustainability issues drives demand for businesses in that space.
Montreal-based engineering-services firm WSP will finance the transaction with a new $1.81 billion term credit facility, it said in a separate statement. The company will “now have approximately 20,000 experts globally, with increased capabilities and reach, including key expertise in the high-growth water sector and an expanded offering to Federal and government clients,” it said.
The built-environment unit, which currently sits within Wood’s broader consulting division, will add $830 million of net revenue to WSP. Wood said consulting will remain a core business for the company.
The agreement marks a final deal for Wood Chief Executive Officer Robin Watson, who is retiring. The transaction “enables us to move onto our next strategic phase with financial flexibility,” he said.
As well as reducing debt, the proceeds could be used to restore dividends, cover some exceptional costs such as legacy asbestos-related liabilities, and fund investments, Wood said.
The company’s shares dropped 2.3% at 9:17 a.m. in London on Wednesday, reversing earlier gains.
The deal is subject to conditions, including Wood shareholder and regulatory approvals. Completion is expected in the second half of 2022.
(Updates with WSP statement in third paragraph, shares in seventh.)
©2022 Bloomberg L.P.
Advertisement