The Business Growth Fund (BGF) has closed its second deal of the week and made its first investment in a Scottish company.
Aberdeen-based STATS Group, which provides services for onshore and offshore oil and gas pipelines, has received £7.8 million from the BGF to fund investment in people and build out its fleet of isolation devices.
The business, which was founded by brother and sister team Peter Duguid and Lorraine Porter in 1998 and had reported revenues of £14 million during 2011, has become the fourth business to receive part of the £2.5 billion fund in 2012. Its product range includes tools used to plug and isolate ‘live’ sections of pipeline to allow for safe pump and valve replacement.
Alongside the growth capital from the BGF, STATS has also received an increase in working capital from Lloyds Wholesale Banking and Markets.
Duguid, CEO and founder of STATS, says that the business has reached a critical juncture in its development.
He adds, ‘To take the business to the next level and capitalise on these opportunities, we realised that we needed an extra boost. That boost has come in the form of an equity investment and the active support of the BGF, whose experience and contacts will help us to make the transition from successful UK firm to an international business of scale operating across multiple regions.’
The BGF, which receives backing from Barclays, HSBC, Lloyds, RBS and Standard Chartered, has so far backed six UK companies through its strategy to inject £2-£10 million in return for a minimum 10 per cent equity stake and seat on the board. CEO of the fund, Stephen Welton, has said that the BGF has long-term plans to back up to 40 companies a year, with 20 to be supported during 2012.
Simon Munro, BGF’s regional director for Scotland, comments, ‘Our investment in STATS is a milestone for BGF, as our first deal in Scotland, our first in a business which manufactures its own products, and our first in the vibrant oil and gas sector.’
Munro says that, moving forward, considerations surrounding integrity and safety will continue to dominate board agendas.
‘We are seeing a strong pipeline of investment opportunities across all sectors in Scotland, a clear indication that businesses here are recognising the value that a supportive equity investor can bring to the table,’ he adds.