WorleyParsons to Buy AFW UK to Enter North Sea Market

MELBOURNE, Australia--Australian engineering contractor WorleyParsons Ltd. will enter the North Sea through a GBP228 million (US$298 million) deal to buy the majority of Amec Foster Wheeler PLC's U.K. oil and gas operations.

WorleyParsons said Monday it will acquire AFW UK Oil & Gas Ltd. for an enterprise value of GBP182 million, plus adjustments for working capital and cash, which is expects will lifts its earnings and lower debt gearing.

Buying AFW UK, which offers engineering and construction services on the U.K. continental shelf, will accelerate WorleyParsons' efforts to build a global business offering maintenance, modifications and operations. AFW UK is being sold to answer competition concerns raised with John Wood Group PLC's planned GBP2.23 billion takeover of rival Amec Foster Wheeler.

WorleyParsons said AFW UK has maintainable revenue of about GBP350 million and earnings before interest, tax, depreciation and amortization of GBP20 million a year.

To help fund the deal, the Australian company will raise 322 million Australian dollars (US$250.1 million) by issuing new stock via a discounted 1-for-10 share offer.

"We are excited to enter the U.K. North Sea market as a leading player based in Aberdeen," WorleyParsons Chief Executive Andrew Wood said.

The acquisition is expected to benefit earnings per share in the first year of ownership, and reduce debt-to-ebitda to 2.2 times from 2.4, the company said.

WorleyParsons has hired UBS AG as its financial adviser on the acquisition and lead manager of the share offer.

Write to Robb M. Stewart at robb.stewart@wsj.com

(END) Dow Jones Newswires

October 08, 2017 18:59 ET (22:59 GMT)