Technical services provider Kaefer has snapped up the industrial services arm of engineering giant Wood in a deal worth up to £91.3 million.

Kaefer – which has a base at Westlakes Science Park in Moor Row near Whitehaven and is a major supplier to the Sellafield site in West Cumbria – will pay around £80.5m initially with a potential further payment of £10.8m if agreed financial goals are met.

Wood’s industrial services business will initially become a wholly owned subsidiary of Kaefer.

The company – which provides integrity and fabric maintenance for the marine, process energy, offshore oil and gas and infrastructure sectors – will ultimately merge with Kaefer, bringing 2,000 employees working across 16 locations in the UK and Ireland under its brand.

Keafer’s chief executive Steen E. Hansen, said the acquisition fits perfectly with its core business.

“Wood’s industrial services business and Kaefer work in different, yet related industries, which is why they complement one another so well,” he said.

“These combined capabilities will support our clients’ success and increase our competitive strength.

“We are certain that this is an excellent step towards reaching the goals established in our strategic programme.”

The acquisition marks a significant expansion for Kaefer, which provides asset integrity services, including access solutions, insulation, inspection and testing, protective coatings and asbestos management. It currently has 12 offices in the UK and employs around 1,200 people.

The sale is part of Wood’s ongoing ‘portfolio rationalisation strategy’, with cash proceeds from the disposal to be used to reduce its debt.

Its chief financial officer, David Kemp, said: “The sale of our industrial services business is the latest divestment aimed at maintaining our strong balance sheet and achieving our target leverage.

“As our focus has moved towards building a premium, differentiated and higher-margin business, the industrial services offering is no longer core to our strategy.

“However, it is an excellent fit with Kaefer who see a clear opportunity to grow the business further and extend its market share across new sectors and geographies."

Wood is currently in the process of disposing of its nuclear business in a £250m deal with Jacobs.

The company says it expects the deal to be completed in the first quarter of 2020 despite an ongoing probe by the Competition and Markets Authority (CMA).

The CMA is investigating whether the acquisition – announced in August last year – would result in a “substantial lessening of competition” in the marketplace as stipulated in the Enterprise Act 2002.

It invited ‘interested parties’ to comment on the acquisition before January 22 as part of its Phase 1 investigation, which has a statutory deadline of March 4.

In a recent trading update Wood expressed confidence the deal will go ahead.

It would see Wood Nuclear Limited and its contracts come under control of Jacobs’ UK division.

Contracts currently held by Wood Nuclear Limited – a long-standing big tier company at Sellafield – include the management of the Design and Engineering lot for the Programme and Project Partners (PPP), which could be worth up to £769m over 20 years, and a £50m contract to provide programmable digital control technologies to the plant in West Cumbria.