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FTSE 100 engineering and technical services provider Wood Group (LON:WG.) has announced the disposal of its non-core conveyor systems business to Terra Nova Technologies for a cash consideration of $38 million. This represents a 5.2x multiple of 2018 EBITDA and the deal is expected to close during the second quarter, subject to usual conditions.
Chief financial officer David Kemp commented: “Terra Nova Technologies has a strong track record in delivering material handling equipment to our customers. Wood’s strategy going forward is to focus on asset light solutions rather than the manufacture / fabrication of equipment. The disposal makes a good contribution to our non-core asset disposal programme which is a key element of our deleveraging plan“.
The markets remained unenthusiastic and the price of Wood Green’s shares fell by 7.39% to 505.30p (as of 13:05 GMT).