Private equity firm Apollo Global Management LLC said May 15 it would not move forward on a previously announced plan to acquire U.K.-based energy and industrial engineer Wood Group plc for about $2.1 billion.
The Wood board agreed to talks with Apollo after the would-be parent’s latest purchase offer made in April, following four rebuffed bids since February. But neither firm would say why discussions ended on an official offer.
Wood ranks at No. 13 on ENR's Top 225 Global Design Firms list, reporting $3.1 billion in revenue in the U.K. and globally.
An activist shareholder had pressured Wood’s board to boost its share price, according to the Financial Times. In a posted note on May 15, the engineer said it “remains confident in [its] strategic direction and long-term prospects,” and with “a transformative year in 2022, including new executive leadership and a new strategy, is well placed to deliver substantial value for shareholders.”
Wood completed last September the sale of its environmental and infrastructure consulting unit to WSP for $1.8 billion, citing needs for more financial flexibility to remove debt liabilities and a refocused strategy on becoming a leader in energy security and sustainability.
The engineer noted in its first quarter results update on May 11, "there is good momentum across all business units ... with expectations for the full year unchanged." It said its medium-term targets set in November 2022 "are to deliver adjusted [earnings] growth at mid to high single digits ... and to return to positive free cash flow in 2024."