Aker Solutions, Norway's flagship oilfield engineering services group, has sold its process and construction business to Jacobs Engineering Group (JEC.N) for 5.5 billion Norwegian crowns as part of a revamp to streamline its activities.
Aker said it would get net cash of 3.8 billion crowns or $634 million from the deal. Jacobs estimated the purchase price at $675 million cash after certain adjustments, including for debt.
"For Aker Solutions, this represents a further step in becoming much more streamlined and focused on our core oil and gas activities going forward," Executive Chairman Oeyvind Eriksen said in a statement on Wednesday.
The process and construction unit had weighed heavily on Aker's Q3 earnings, which fell 13 percent year-on-year to 880 million Norwegian crowns ($147.6 million) in part because of delays and cost overruns at a power plant the unit is constructing in the United States.
Aker had said earlier this month that it planned two spin offs to free up capital to support growth.
One was the onshore process and construction unit that Jacobs has now agreed to buy.
The other was Aker Contractors, an engineering, procurement and construction (EPC) company focused on North Sea field development that will now take over parts of the process and construction unit excluded from the Jacobs sale.
Eriksen said Aker had considered an initial public offering and public listing of its process and construction business before deciding to sell.
"As the alternatives matured over recent weeks, a sale to Jacobs evolved as the preferred solution industrially as well as financially," he said.
"The price is fantastic," said Arctic Securities' analyst Kjetil Garstad, looking at the deal from the Norwegian firm's point of view.
