Wood completes $138m sale of EthosEnergy stake to One Equity Partners

John Wood Group PLC, a global leader in consulting and engineering, has finalized the sale of its 51% stake in Ethos Energy Group Limited to private equity firm One Equity Partners. The $138 million transaction is a milestone in Wood’s ongoing strategy to simplify its operations and focus on core business areas.

EthosEnergy Sale: A Strategic Move to Refocus Operations

Wood’s decision to divest its stake in EthosEnergy aligns with its broader initiative to streamline its portfolio. EthosEnergy, a joint venture established with Siemens Energy AG, specializes in rotating equipment services, including maintenance, repair, and energy optimization solutions.

While the business employed approximately 3,600 people globally and contributed $34 million in adjusted EBITDA to Wood’s 2023 financials, it was categorized as a non-core asset within the company’s Investment Services division. Importantly, EthosEnergy’s revenue was not directly recognized in Wood’s consolidated accounts, further underscoring its classification as non-core.

The transaction, completed on December 31, 2024, replaced a previously planned $42 million loan note arrangement with an increased cash consideration. This adjustment ensured that the deal brought in a substantial upfront net cash inflow for Wood.

CEO Insights on the Sale and Strategic Priorities

Ken Gilmartin, Wood’s Chief Executive Officer, characterized the sale as a critical step in achieving the company’s long-term objectives. He noted that simplifying the company’s portfolio and refocusing on markets where Wood holds a competitive advantage remain top priorities.

“This divestment reflects our commitment to a focused and selective approach to our business. We believe EthosEnergy has strong growth potential under its new ownership, and we remain committed to delivering value to our shareholders through strategic decisions like this,” Gilmartin explained.

The Role of One Equity Partners in EthosEnergy’s Future

One Equity Partners, a New York-based private equity firm, specializes in partnering with industrial and energy businesses to unlock their full potential. Industry analysts view this acquisition as a promising opportunity for EthosEnergy to expand its services and strengthen its market position in the energy sector.

Jennifer Richmond, Wood’s Chief Strategy Officer, expressed confidence in the alignment between EthosEnergy and One Equity Partners, emphasizing that the divestment was structured to benefit all stakeholders involved. Richmond reiterated that the sale supports Wood’s aim to deliver greater cash flexibility while aligning its portfolio with strategic priorities.

EthosEnergy in Context: A Non-Core Asset in Transition

EthosEnergy has been a significant joint venture for Wood since its inception, with Siemens Energy AG as the minority stakeholder. However, as Wood sharpens its focus on consulting, engineering, and high-growth sectors, EthosEnergy’s specialized services in rotating equipment became a less strategic fit within its portfolio.

This sale, along with other ongoing divestments such as the planned sale of CEC Controls Company Inc., illustrates Wood’s comprehensive effort to realign its business. Combined, these transactions are expected to generate approximately $165 million in net proceeds by the end of 2024, further bolstering Wood’s financial position.

Looking Ahead: Wood’s Strategic Realignment

The EthosEnergy sale marks a continuation of Wood’s multi-year transformation strategy. By divesting non-core assets, the company aims to consolidate its operations around high-priority markets, enhance profitability, and increase shareholder value.

The proceeds from this transaction, along with those from other planned sales, are expected to support investments in Wood’s core businesses. These include consulting and engineering services that address global challenges in energy transition, decarbonization, and digitalization.

Expert Perspectives on Portfolio Simplification

Industry experts view Wood’s move as part of a broader trend among large corporations seeking to streamline operations and adapt to rapidly changing market demands. By focusing on its strengths, Wood is positioning itself to capitalize on emerging opportunities in energy and infrastructure.