Subsea firm Rovop is aiming to expand its fleet of remotely operated vehicles (ROVs) after securing a £10 million cash injection.
The investment, from the Business Growth Fund (BGF), was unveiled today as business minister Fergus Ewing officially opened the firm’s new £4.2m headquarters in Aberdeen.
Rovop chief executive Steven Gray said demand for the company’s technology and services is growing as offshore oil and gas companies seek to reduce their costs in response to the fall in crude prices, which have almost halved since last summer.
He said BGF’s investment had come at a “particularly opportune time” for the business, which was founded in 2011 and earlier this month established a support base in Houston, Texas.
“The industry needs to change in order to reduce cost,” said Gray, a former corporate lawyer, banker and private equity investor to the energy industry.
“With our bases in Aberdeen and Houston, Rovop allows operators and offshore contractors to work more efficiently and save cost, while applying the highest standards in health, safety, environmental control to operations.”
Gray said the BGF funding would support the company as it seeks to growth its ROV fleet over the next three years to about 50 units, operating around the world. He added: “The BGF team in Aberdeen are experts in our sector and we look forward to working with them over the coming years to realise the next phase of our growth.”
The funding deal will see Ken McHattie, vice-president of accounting trade body Icas and chairman of fellow Aberdeen firm Aurora Petroleum, join Rovop as a non-executive director. He will be joined on the board by BGF investment director Mike Sibson, a former drilling engineer at Shell.
Sibson said: “Rovop is a highly professional operation with a strong business model based on the best service with the best technology. BGF’s investment will support growth of the fleet both from the UK operation, but also in the Americas where we see significant opportunity.
“Since founding the business less than four years ago, Steven Gray and chairman Mark Vorenkamp have assembled a very experienced team from across the subsea industry, and we are confident they will continue to enjoy success.”
BGF, which invests between £2m and £10m per business in return for a minority equity stake and a seat on the board, was set up in 2011 by banking groups Barclays, HSBC, Lloyds, Royal Bank of Scotland and Standard Chartered.
Its investment will enable Rovop, which employs about 130 people, to repay a £5m loan that it secured in 2012 from the Scottish Loan Fund (SLF), which is managed by private equity firm Maven Capital Partners.
Gray said: “The funding we received from SLF played a pivotal role in the international expansion of our business and I believe Rovop is a good example of how SLF can support ambitious companies to unlock growth that might not have otherwise been achieved.”
Rovop’s Westhill headquarters include a training academy, underwater ROV testing facility and a 40-tonne overhead crane.
On a visit to the three-storey 18,500sq ft facility, Ewing said: “Rovop has a long history of working across the globe and they have shown a commitment in investing in the workforce in Scotland.
“This is a testament to the quality and skills of the local workforce. Scotland’s energy sector boasts strong engineering and manufacturing skills that are globally recognised across the oil and gas industry.”