Wood Group’s revenues soar as the energy services group’s investors await the deadline for the acquisition of Apollo private equity
- Wood Group announced first-quarter sales of approximately $1.45 billion
- Based in Aberdeen, Wood employs more than 35,000 people in 60 countries
- Apollo has until May 17 to make a firm resolution for Wood or walk away
John Wood Group has reported stronger first-quarter earnings less than a week ahead of a private equity candidate’s deadline to make a concrete takeover offer for the company.
The energy services company maintained its full-year guidance, revealing revenue for the quarter ended March of approximately $1.45 billion (£1.25 billion) driven by healthy demand across all business units.
The order book at the end of March remained strong at approximately $5.7 billion, although this was approximately $300 million lower than in December, attributed to the phasing of large multi-year awards in the operating division.
Takeover target: John Wood Group is the subject of a £1.7bn takeover bid from private equity giant Apollo Global Management
Despite significant economic uncertainty, the company maintained its annual guidance for mid- to high-single-digit adjusted underlying earnings growth.
“While we remain aware of the uncertain economic outlook, our expectations for 2023 remain unchanged,” the company told investors on Thursday.
Headquartered in Aberdeen, Wood employs more than 35,000 people in 60 countries in industries ranging from US shale oil to North Sea oil, carbon capture and wind energy.
The group is currently the subject of a takeover bid from private equity giant Apollo Global Management, which has until May 17 to announce its firm intention to make a bid for Wood or walk away.
After turning down four previous proposals, Wood agreed to Apollo last month after receiving a £1.7 billion bid from the US asset manager.
At 240 pence per share, the deal is 40 pence more than the initial offer and represents a 17 percent premium over Wood’s closing price the day before the final offer was made.
Apollo’s interest in Wood comes amid a wave of London-listed companies being snapped up by foreign private equity houses attracted by a weaker pound and cheaper valuations.
Another takeover target of Apollo is THG, whose share price is down more than 80 percent since going public three years ago.
Matt Molding’s e-commerce business suffered from a slowdown in online sales, corporate governance concerns and huge losses from investments in infrastructure and staff.
Other UK companies that received takeover bids in April included real estate fund Industrials REIT, payment processor Network International and veterinary products developer Dechra Pharmaceuticals.
Sureserve, a social housing maintenance contractor, also agreed to a £214.1 million approach from Cap10 Partners.
Victoria Scholar, head of investment at Interactive Investor, said: ‘The UK market has underperformed relative to Europe in recent years, amid reputational damage since Brexit, providing attractive valuations for acquiring companies.
“In addition, the pound suffered last year, adding to the allure of the UK, but with the pound’s recovery, time is ticking for overseas buyers looking to take advantage of the FX advantage.”
John Wood Group shares were flat at 221.2p Thursday morning. They’ve grown about 56 percent since the beginning of the year.