Sale of nuclear business will lead to 400 new jobs
John Wood Group, the global engineering and consulting company, has closed the sale of its nuclear business to Jacobs for a cash consideration of £250m.
US-based Jacobs, which already employs 1,100 staff in Warrington and Manchester, said it will recruit up to 400 new members of staff over the next year.
The deal represents a multiple of approximately 12.4x based on 2018 EBITDA of £20.2m for the business, which employs 1,250 staff in Cheshire.
Agreement on the deal was reached in August 2019, with closing conditional upon merger clearance from the Competition and Markets Authority, which was received on March 4, 2020.
The cash proceeds from the nuclear divestment and the recent sale of Wood’s industrial services business generated a total of $429m.
These moves form part of Wood’s ongoing portfolio optimisation focus and will also enable the company to reduce debt and accelerate progress towards its target leverage policy.
Wood’s nuclear headquarters were in Knutsford and Warrington where the company employs 1,250 staff, working in new build, reactor support and decommissioning across two sites on some of the most complex and challenging locations around the world, including Sellafield, Fukushima and Chernobyl.
At Birchwood, staff provide nuclear safety assurance and materials research and testing to support the UK’s nuclear submarines.
Dallas-based Jacobs Jacobs currently has 250 people in Warrington and another 850 in Manchester working on nationally important projects for Sellafield, the Nuclear Decommissioning Authority, Environment Agency, Highways England, Network Rail, and other clients in the North West of England and beyond.
The combined 2100+ team in the region supports projects and programmes across nuclear and defence, transportation, environmental, buildings, and other sectors.
Jacobs said it will recruit 300 to 400 additional employees into highly-skilled roles over the next year.
Jacobs’ plans also include investment in the UK’s largest independent nuclear research, development and testing facilities at Birchwood Park to provide capability such as remote handling, cyber, inspection technology capabilities and test rig facilities.
Leveraging Jacobs’ integration approach, a joint Jacobs-Wood Nuclear Integration Management Office (IMO) has been formed and is working to oversee the integration process, building on the strong cultural foundations of both organisations to maximize the value of the new entity.
Steve Demetriou, chair and CEO of Jacobs, said: “Bringing together Wood Nuclear within Jacobs’ critical mission solutions business provides a powerful platform to support clients’ complex programmes, respond to unprecedented changes in the many sectors and geographies where we work and help accelerate commitments to a more sustainable future.
“With our shared values, technical heritage and global reach, we are combining complementary capabilities to deliver high-value, differentiated nuclear and defence solutions for our clients and greater opportunities for our people across our diverse portfolio.”
David Kemp, Wood’s chief financial officer, said: “Future portfolio optimisation will continue to be driven by our strategic objective of building a premium, differentiated, higher margin business focused on energy and built environment end markets.
“The sale of our nuclear business and other recent divestments have also enabled us to accelerate progress towards our leverage target.”
The nuclear business Wood has divested designs, delivers and maintains strategic and complex nuclear assets, primarily for customers in the UK.
Wood’s environment and infrastructure consultancy will continue to deliver environmental, regulatory and permitting support, including large-scale remediation of radiological constituents in various markets including North America.
At Birchwood, Wood’s staff provide nuclear safety assurance and materials research and testing to support the UK’s nuclear submarines.
As a former UK Atomic Energy Authority site, Birchwood has a long history as a major centre for the UK’s nuclear industry.
Sellafield, in Cumbria, Wood’s largest customer, has its engineering and design offices in Birchwood. Co-location enabled Wood to work in integrated teams on major projects and deliver the best solutions to customers.
Wood has invested £2m into laboratory and test rig facilities on site in the past two years. These facilities play an important role in the maintenance and operation of the UK’s 15 nuclear power reactors on behalf of EDF Energy.