LDC, the private equity arm of the Lloyds Banking Group, has invested £17million in fast-growing Aberdeen business Subocean Group.
The subsea construction company, which is now one of the largest providers of services to the marine renewables sectors in Scotland and the UK, will aim to use the investment to double the size of the business in two years and achieve a turnover of £300million by 2014.
The company secured LDC’s equity investment as part of a £42million fundraising in one of Scotland’s biggest private equity deals this year. LDC has a significant minority stake, and the deal values Subocean at in excess of £75million.
Subocean managing director John Sinclair said: “LDC’s investment demonstrates fantastic confidence in the business and its potential, particularly within marine renewables where we are now working on more than 50% of offshore windfarm projects currently under construction in UK waters.
“With an order book standing at £150million, we have strong foundations for our ambitious growth plans, which the new equity will help us pursue.
“To date, Subocean has only been addressing UK market requirements, but we see an even bigger opportunity to capture a significant share of business outwith the UK from 2011 when other European governments start progressing their own renewable targets for 2020.
“This investment will also enable us to expand our existing offshore wind operations, invest in the latest equipment and further develop our offering in both renewables and oil and gas markets.”
Subocean, which was formed in 2005, now employs 90 people and has a turnover of £70million, in excess of 75% of which is now derived from the fast-growing renewable energy sector. The company anticipates a 50% growth in employment within the next two years.
James Rodger, LDC’s director in Scotland, said: “This is LDC’s first investment in Scotland since opening offices in Aberdeen and Edinburgh last year, and is the 15th investment nationally in 2009.
“The private equity market this year has generally been quiet throughout the UK and particularly in Scotland. However, LDC’s philosophy is to support first-class management teams and to seek investment opportunities throughout the economic cycle. Subocean is a great investment to end what has been another excellent year for LDC.”
Alongside this investment, Subocean has also secured expansion and working capital facilities of around £25million from HSBC Bank.
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