An Aberdeen-based subsea services company has been snapped up by investors including the Saudi-based investment bank of ten Arab countries.
Arab Petroleum Investments Corporation (Apicorp) and its London-based venture capital partner, Buckthorn, have acquired a majority share of Ashtead Group for an undisclosed sum.
The new owners said the investment would enabled Ashtead to expand its geographical reach, particularly in the Middle East.
The deal marks a secondary buyout for the firm after it emerged from its former parent company, FTSE-100 listed Ashtead Group in 2008.
Ashtead, which employs 75 people in Aberdeen, London, Houston and Singapore with agents in Abu Dhabi, Perth and Stavanger, was bought out six years ago by Phoenix Equity Partners in a £95.6million deal. Phoenix will retain a small stake in the business once the transaction has completed.
Chief executive Allan Pirie will continue to lead Ashtead’s management team, while Nicholas Gee from Buckthorn joins as chairman and Bennie Burger, executive vice president of Apicorp, also joins the board.
It is the second deal Buckthorn and Saudi investors have made in the north-east after it and the corporate venturing subsidiary of Saudi Aramco took a minority £5million stake in Paradigm Drilling Services (PDS) last year.
The new investors said Ashtead’s ability to offer lower cost services in current market conditions attracted them to the deal.
Mr Gee, who started his career with BP in the North Sea, said: “With its long subsea heritage, strong management team and robust market position Ashtead is well placed to make the most of the current market conditions.
“Our objective is to develop an innovative business that will bring new services to reduce cost and risk, and add value to customers throughout the value chain.
“The market fundamentals for subsea services remain strong and Ashtead Technology is in great shape to play a crucial and defining role in this sector.”
Dr Raed Al Rayes, deputy chief executive of Apicorp, said the deal “perfectly matches our stringent acquisition criteria”.
He added: “Ashtead’s market position, cutting edge technology, experienced management and track record of achieving cost savings for their clients in the oil industry leave it well placed to take advantage of the prevailing economic conditions.”
Mr Pirie said the deal was a “great outcome” for Ashtead customers, suppliers and staff.
“This deal signals confidence both in our business and in the long-term direction of the market sector in which we operate,” he said.
“As the market evolves to cope with the long-term effects of the current oil price, service companies like Ashtead must assist in reducing project cost and risk, helping our customers to focus on their core competences.
“This initial investment coupled with access to further capital will enable us to significantly expand our expertise in subsea inspection, repair and maintenance (IRM) to fulfil our ambition of becoming an integrated services provider.”
Apicorp was created by the 10 member states of the Organization of Arab Petroleum Exporting Countries (OAPEC) in 1974.
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