Companies
Buyer of Services Giant Wood Group Pulls $2B Bid at Deal Crunch Time
Dubai AEC consolidator Sidara pulled the plug on the estimated $2B acquisition of energy-industrial services firm Wood Group days before an Aug. 9 deadline to make a final offer.
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Just days before an Aug. 9 deadline to make a final acquisition offer, Dubai-based engineer Sidara, formerly Dar Group, has halted its plan to buy U.K.-based energy and industrial services firm Wood Group plc—citing "rising geopolitical risks and financial market uncertainty."
Sidara, which had only been negotiating with Wood Group since June based on a $2.03-billion offer after three lesser-value bids were rejected, did not provide further detail on the deal withdrawal on Aug. 5 that followed due diligence completion. The firm also declined to respond to an ENR query.
Media speculated on rising Middle East political tension since the Oct. 7 hostilities began in Gaza and Israel. The region, along with Africa, generated 18% of Wood Group revenue last year, the Aberdeen, Scotland-based firm said previously.
The company, which also has a large U.S. operation, did not elaborate on the buyout withdrawal but said it "remains confident in [its] strategic direction and fundamental prospects."
Wood Group CEO Ken Gilmartin noted in a mid-July market update that as part of a refocused "simplification" strategy announced in 2022, the firm has “secured” about $25 million of $60 million in annualized savings it targeted for next year and expects a 4% rise in net earnings for the current half year that ended on June 30.
Even so, the Wood Group share price on the London Stock Exchange fell by more than 38% on Aug. 5 to about $121 after the deal update, but had recovered to $161 as of Aug. 8.
Wood Group will report first-half 2024 results to investors on Aug. 20. The firm ranked 46th on ENR's most recent Top 500 Design Firms ranking.
Sidara is the second would-be buyer of Wood Group in recent years to withdraw its offer, following private equity firm Apollo Global Management in May 2023.
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