Lloyds and Sir Fraser Morrison oil services deal

By DOMINIC JEFF
Published on 19/03/2013 00:00

Construction tycoon Sir Fraser Morrison has sold his holding in an Aberdeen oil services firm to the private equity arm of Lloyds Banking Group in a deal worth more than £30 million.

Morrison, the former boss of Morrison Construction whose family controls Edinburgh-based RMJM Architecture, had backed a 2005 management buyout that created pipe maintenance specialist Ramco Oil Services as a spin-off from the company of the same name that became SeaEnergy.

Lloyds’ private equity business, LDC, said yesterday that it was paying more than £30m for a “substantial majority stake” in Aberdeen-based Ramco. Financial details were not released but the figure includes money to finance overseas expansion.

Clydesdale Bank, Ramco’s lender, is providing extra debt facilities to support the growth drive.

Morrison said: “It has been a pleasure to have worked with the excellent team at Ramco over the past eight years.

“I am delighted LDC have chosen to invest in the business and wish them and the management team the very best in what is a very active sector.”

According to the Sunday Times rich list, Morrison and his brother Gordon are estimated to be worth some £85m. It is not clear how much the latest windfall adds to that total.

In what is described as a “secondary buyout”, LDC is supporting Ramco’s management, some of whom also have holdings in the business.

The deal was negotiated by the head of LDC’s Aberdeen office, Mark Kerr, who will now join the company’s board.

He said the investment group was looking to further increase its portfolio in Aberdeen’s booming oil services sector this year.

“LDC is very optimistic about the outlook for the oil services industry in the North Sea and the opportunity this creates for companies like Ramco with strong areas of sector expertise built up over many years of operation,” he said.

“We hope that this will be the first of several oil service investments that LDC will make during the course of this year and believe it demonstrates LDC’s commitment to both Aberdeen and Scotland, and appetite to invest in the oil services sector.”

Headquartered in Aberdeen’s Badentoy Park, Ramco’s core business is the storage, cleaning and preparation of piping used in oil and gas wells. It employs about 230 people across operations in the UK and Norway. It also works in China, Japan and Romania.

It owns 50 per cent of BSR Pipeline Coating, a joint venture with Tata which specialises in coating pipes.

Chief executive Stewart Cumming said the buyout was a vote of confidence in Ramco’s service and the skills of its workforce, which would transfer well to other oil and gas producing regions around the world.