Bosses at Wood (LON: WG) are “confident” the sale of its built environment business will elicit an increase in the division’s headcount.
A number of “high quality” parties are interested in acquiring the department, and a sale agreement is likely to be struck towards the end of June.
Spinning off the business is anticipated to generate “significant value” for Wood’s shareholders, according to Robin Watson, the company’s outgoing chief executive.
It will also strengthen the Aberdeen-headquartered energy services giant’s balance sheet, affording the “financial flexibility” needed to deliver its strategy.
It was announced last year that Wood was considering a sale of its built environment section, which boasts a 7,000-strong workforce, as part of a “strategic review”.
And in its full-year results for 2021, published on Wednesday, the company revealed the sales process is nearing its completion.
Mr Watson said: “We’ve gone through a few milestones on the bid process and we’ve a number of high quality, interested parties who are very much still in the running.
“We’ll be going through a sales agreement, we think, in the second half of June, around the same time as our annual general meeting.”
The built environment business accounts for about a quarter of Wood’s revenue and sits almost entirely in the company’s consulting business.
Across the globe it employs 7,000 people, around 6,000 of which are in the US and Canada – the remainder are primarily in the UK.
Wood is pursuing a “complete sale” of the division, and Mr Watson, who announced yesterday that he will be retiring from the company, expects it to flourish as a result.
He said: “The built environment division has been on a growth trajectory – we’ve been adding workers to that part of the business over the course of 2021.
“In terms of job security, we envisage it being a whole sale of the whole business and we’re quite confident that the headcount will go up, rather than down, as we go through the sales process.
“It is not a department that is being sold to cut costs and reduce the headcount; it’s a business that’s being sold with a positive trajectory.”
Mr Watson said the sale of the department would be a fitting “milestone” on which to bring his time at Wood to a close.
Built environment offers consulting and engineering solutions to address environmental risks, increase climate resilience, help to build more sustainable infrastructure and improve mobility.
It operates across government, transportation, water, industrial, energy and mining markets.
As Wood entered 2021 it opted to carry out a “strategic review” of its operations, specifically its built environment division.
Mr Watson said: “When we looked at the strategic options we had, the most attraction one was a sale of the built environment business.
“We felt it was significantly undervalued in our portfolio, and secondly there’s little synergy between that operation and the rest of our energy portfolio. You’ve got 25% of the business with very little crossover with the other 75% of the business.
“That was the logic behind the strategic review and we determined as a board that the right thing to do would be to have a disposal. That would allow us to reduce our debt, return some money to our shareholders and unlock investment for our energy transition.”
