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first_img The only surprise was the price GE paid whatsapp KCS-content by Taboolaby TaboolaSponsored LinksSponsored LinksPromoted LinksPromoted LinksYou May LikeMisterStoryWoman Files For Divorce After Seeing This Photo – Can You See Why?MisterStoryMoneyPailShe Was A Star, Now She Works In ScottsdaleMoneyPailTotal PastThe Ingenious Reason There Are No Mosquitoes At Disney WorldTotal PastSerendipity TimesInside Coco Chanel’s Eerily Abandoned Mansion Frozen In TimeSerendipity TimesBrake For ItThe Most Worthless Cars Ever MadeBrake For ItBetterBe20 Stunning Female AthletesBetterBeZen HeraldNASA’s Voyager 2 Has Entered Deep Space – And It Brought Scientists To Their KneesZen Heraldautooverload.comDeclassified Vietnam War Photos The Public Wasn’t Meant To Seeautooverload.comElite HeraldExperts Discover Girl Born From Two Different SpeciesElite Herald whatsapp EVERYONE knew Wood Group was about to sell its well support unit to GE, but few thought it would fetch as much as $2.8bn (£1.75bn). Management have covered themselves in glory with this deal. Whatever multiple you look at – 17.4 times 2010 ebitda or 30 times earnings – it is clear that Wood drove a hard bargain. The firm’s decision to return $1.7bn of the proceeds to shareholders, most likely through a buyback, will be 20 per cent accretive to earnings per share, according to Wood’s advisers. As surprises go, this is a particularly nice one. Investors would be wise to look again at other businesses with similar assets, after GE was willing to pay such a handsome sum for a well support arm. AMEC and Petrofac in particular deserve attention. It wasn’t just the multiples, however. Management rightly believes that the deal will allow them to focus on the firm’s core oil and gas business, as well as its gas turbine arm.We reckon the firm is also a more attractive takeover target, especially for the likes of AMEC. The pair now share a core focus on engineering, and would be a neat fit, although yesterday’s deal will make any valuation more challenging. So what of the rest of the group? Well Support accounted for $166m of group ebitda in 2010, around 41 per cent, but the firm still looks undervalued after yesterday’s jump.The residual Wood Group now trades at around 12 times earnings, against a sector average of around 18 times, suggesting a flurry of upgrades in the pipeline. There will likely be some profit taking in the short term – there always is after a rally of this kind – but long-term investors should sit tight. center_img Read This Next’The View’: Meghan McCain Calls VP Kamala Harris a ‘Moron’ for BorderThe Wrap4 ideal Zion Williamson trade scenarios from the New Orleans PelicansSportsnautRicky Schroder Calls Foo Fighters’ Dave Grohl ‘Ignorant Punk’ forThe WrapRick Leventhal to Exit Fox News Just as His Wife Kelly Leaves ‘RealThe WrapNewsmax Rejected Matt Gaetz When Congressman ‘Reached Out’ for a JobThe Wrap’In the Heights’ Underwhelms at Box Office With $11.4 Million DebutThe WrapJason Whitlock, Former ESPN and Fox Sports Reporter, Resurfaces at BlazeThe WrapFox News’ Mark Levin Says Capitol Riot Suspects ‘Would Be Treated Better’The Wrap’Sex and the City’ Sequel Series at HBO Max Adds 4 More ReturningThe Wrap Share Show Comments ▼ Monday 14 February 2011 9:13 pm Tags: NULLlast_img

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