LDC, the private equity arm of the Lloyds Banking Group, has invested in fast-growing Aberdeen-based 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 use the investment to double the business in two years and achieve a turnover of £300million by 2014.
The company secured LDC's £17million 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, valuing Subocean in excess of £75million.
Subocean managing director and shareholder, 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 over 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 which the new equity will help us pursue.
"To date, Subocean has only been addressing the 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 first formed in 2005, now employs 90 people with 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 commented "LDC is delighted to support Subocean and its management team. Following a series of major contract wins, the company has become a leading player in a sector which is poised for major capital investment over the next ten years."
"This is LDC's first investment in Scotland since opening offices in Edinburgh and Aberdeen last year, and is the fifteenth 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."
Rodger is joined on the Subocean Board by fellow LDC Director Steve Carle. Steven Gray from LDC also worked on the transaction.
The deal was initiated by Simmons & Company International Limited. Nick Dalgarno, Simmons' managing director said, "The team at Subocean has done a tremendous job in establishing the business as the UK's leading cable installation contractor for offshore wind farms. The investment by LDC is testament to that and will provide the stability and financial support to enable Subocean to deliver its exciting growth prospects,"
Alongside this investment, Subocean has also secured expansion and working capital facilities of around £25million from HSBC Bank.