An Aberdeen-based diversified oilfield services group has strengthened its operations after buying two companies. Sovereign Oilfield Group spent £7.9 million adding Labtech Services and Vertec Engineering Services to its business.

An Aberdeen-based diversified oilfield services group has strengthened its operations after buying two companies. Sovereign Oilfield Group spent £7.9 million adding Labtech Services and Vertec Engineering Services to its business.

Labtech cost Sovereign £6 million with Vertec bought for £1.9 million in cash. The Labtech deal comprised £3.6 million in cash with the balance satisfied in loan notes to be redeemed at the end of the year and in April 2008.

The terms of the deals included Labtech’s associated companies and Vertec’s subsidiary with the existing management teams continuing to run the businesses post-completion.

Labtech and Vertec design and manufacture onshore and offshore cabins, containers, baskets, air conditioning and refrigerating units. In addition to this, the acquired businesses have repair and refurbishment operations as well as cabin hire services.

These acquisitions strengthen Sovereign’s fabrication businesses and operations as well as expanding its product offering. The deal also introduces new clients to the group.

Labtech, founded 24 years ago, has some 130 employees at its purpose built site in Aberdeen. Its audited turnover for the year to April 2006 was £7.2 million with a profit before tax of £700,000.

Vertec has been trading since 1985 and in the year to September 2006, it reported an audited turnover of £6.8 million and a profit before tax of £300,000.