U.S. group Jacobs will buy U.K. energy services group John Wood's nuclear business for $300 million, the U.S. company announced on Tuesday.
According to Jacob's statement, the company entered into an agreement to acquire John Wood Group's nuclear business, which designs and maintains nuclear assets, for an enterprise value of £250 million or approximately $300 million on a debt-free, cash-free basis.
Jacobs expects to close the acquisition by its fiscal second quarter in 2020.
"This acquisition further strengthens Jacobs' position in highly profitable and complementary sectors within nuclear and defense, enhancing our recognized program management skills with deep, technical expertise," said Jacobs' Chairman and CEO Steve Demetriou.
The U.K. energy services group John Wood said proceeds from the sale would be used to cut debt.
"The cash proceeds from the divestment will be used to reduce debt and will enable Wood to take a significant step towards achieving its target leverage policy," John Wood said in a statement.
"The sale of our nuclear business follows other recent divestments and marks a significant step towards achieving Wood's target leverage policy. Although our nuclear business is a strong U.K. player and has performed well, we see better opportunities to develop clear global leadership positions across other parts of our business," Wood’s Chief Financial Officer David Kemp said.
In 2018, the company's profit before tax for the year amounted to $14.2 million and gross assets at year-end amounted to $464 million, according to John Wood.
John Wood, which has been at the forefront of the nuclear industry for more than 60 years, owns and operates the U.K.'s largest independent nuclear research and testing facilities.
By Firdevs Yuksel