Bank Of Scotland Invests UK80 Million In Scottish Subsea Business

Bank of Scotland Integrated Finance has invested UK80 million in Aberdeen-based subsea company Integrated Subsea Services (ISS) to enable the business to fast-track its expansion plans.

The overall deal valued at UK143 million will see Bank of Scotland provide new banking facilities, which include refinancing of existing debt, and take an equity stake in the business which is forecast to reach a turnover of UK150 million in three years.

Established in 2002 by Ian Herd and Bruce Webster with support from Bank of Scotland, ISS provides specialist diving, remotely operated vehicle (ROV) and survey services for all kinds of subsea oil and gas operations. This ranges from new field installation to subsea well intervention and abandonment to pipeline and platform repair and maintenance. The company now has an offshore workforce of approximately 500 people involved in diving, ROV and survey operations. Mr Herd and Mr Webster, who remain majority shareholders, are committed to an ambitious growth strategy which includes further internationalisation and capital investment.

"This cash injection by Bank of Scotland will enable us to speed up our planned investment in people and training and in our ROV fleet so that we can capitalise on the international opportunities available to the business. This year we have already rolled-out a UK20 million capital expenditure programme which included the purchase of eight new remotely operated vehicles capable of operating in ultra-deep water to service global demand for our underwater contracting services as well as a significant recruitment drive which resulted in 60 experienced ROV operators and trainees joining the business," said Webster.

"We identified the Bank of Scotland as the best partners to finance our continued growth. They have been with us since day one and have a real understanding of our business as well as sharing our ambitions."

Ritchie Clark, Director of Bank of Scotland Integrated Finance said: "We are delighted to continue to support a highly successful locally based company. ISS is a market leading business operating in one of the fastest growing sub sectors of the oil and gas industry. Management have delivered exceptional growth over the last five years and this transaction represents an excellent opportunity for us to deliver an innovative debt and equity funding package that will provide the management team with a platform to accelerate their growth plans."

The deal was initiated by Simmons & Co and director Nick Dalgarno commented: "ISS is one of the North Sea's great recent success stories and this deal is recognition of the achievements of the company and its management team over the last five years. The subsea sector is one of the fastest-growing industry sectors nationally and internationally. The global market has grown by almost 90% in the last five years and is forecast to be worth in excess of $200 billion over the next four years.

"ISS has the potential to capture a significant share of that market and this transaction provides a tremendous platform for the company to embark on an aggressive growth strategy."